The Doctors’ Lounge
Where scalpels meet systems — and physicians say what they really think.
Co-hosted by Anish Koka, MD & Anthony DiGiorgio, DO. Candid talks on healthcare policy, reform, physician autonomy & patient care.
The Doctors’ Lounge
Scott Becker on Building Becker's Healthcare, Physician Supply, and Private Enterprise
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Episode Summary
Anish Koka and Anthony DiGiorgio sit down with Scott Becker, founder of Becker's Healthcare and partner at McGuireWoods, on the business of medicine — his path from healthcare lawyer to media mogul, the real story behind physician supply shortages, why private enterprise (not government) is driving healthcare's real progress, and the debate over breaking up consolidated hospital systems.
Chapter Markers
00:00 Welcome and introducing Scott Becker
01:22 Origin story: building Becker's Healthcare
09:53 The "teach and entertain" media philosophy
14:57 Law school with Barack Obama
16:57 Physician supply and the ACA's coverage-without-supply gap
19:48 Healthcare inflation and third-party payment
24:41 Is there really a spine surgeon shortage?
37:10 Physician burnout, autonomy, and leaving clinical medicine
41:08 Reagan, Mamdani, and government vs. private healthcare
46:00 Pushing back: is "nothing we can do" a real answer?
48:30 340B reform, site-neutral payments, hospital margins
53:41 Lina Khan, Mark Cuban, and health system consolidation
57:18 Can private industry absorb hospital revenue losses?
1:04:47 Payers as the real customer, price transparency
1:06:16 Keeping Becker's Healthcare editorially independent
1:13:44 Closing thoughts and the new book
Co-Host Handle
@anish_koka and @drdigiorgio
Show Handle
@drsloungepod
Subscribe Links
Spotify: https://open.spotify.com/show/44vw8eirsKKnjgNIrdDvrR
Apple Podcasts: https://podcasts.apple.com/us/podcast/the-doctors-lounge/id1832097658
YouTube: https://www.youtube.com/@TheDoctorsLoungePod
Resource: Dr. Scott Becker Book:
Building Great Businesses: Create Momentum, Overcome Setbacks, and Scale with Confidence — Scott Becker & Molly Gamble https://www.amazon.com/Building-Great-Businesses-Momentum-Confidence/dp/1637635400
Becker's Healthcare: https://www.beckershospitalreview.com/
Scott Becker on X: @becker_sbecker
Becker's Healthcare Show Handle: @BeckersHR
🔗 Connect with the Hosts:
You like your healthcare plan? You keep your healthcare plan. Nobody knew that healthcare could be so complicated. This is the Doctor's Lounge.
SPEAKER_03We are live on the Doctor's Lounge for our regular Thursday, 9 p.m. slot. We've been incredibly lucky with a lot of amazing guests. And uh today is no exception. We have the great Scott Becker. Scott Becker is the founder and publisher of Becker's Healthcare, one of the most widely read and listened to media operations in all of American healthcare. He's a partner at Maguire and Maguire Woods, one of the country's leading healthcare law firms. Through Becker's Healthcare Review at the Becker's Healthcare podcast, he's got a suite of conferences and publications. He's always taken, I always see these pictures with like these the most famous people that you can imagine. I'm always like amazed. So he's everywhere, it seems like. He's spent decades building the infrastructure of thought leadership that healthcare executives actually rely on to understand where the industry is going. He is extraordinarily well credentialed, even though he's extremely humble and uh is very kind and generous, met him in person. He's a wonderful guy as well. He's a Harvard law graduate, CPA. He's written four books. And we're going to talk about his journey, where he thinks healthcare is going, and a book that he has uh written. So, Scott, welcome to the Doctor's Lounge.
SPEAKER_00Anish Dr. Coca, Dr. DiGiorio. Thank you so much for having me, DeGiorgio. It's uh great to be with you. You're two of my favorite advocates for the healthcare system, common sense in healthcare. So for me, it's a great privilege and honor to visit with you guys. I can't tell you how excited I am to visit with you, and you're both just fantastic. I follow both of you relentlessly on Twitter, X, whatever we call it today. And the beauty of it, your perspectives line up, I would say about 98% with my view of the world. So I love following the both of you and hearing your thoughts, which is probably part of the world's challenges in terms of echo chambers, but I do love your thinking and how you perceive things and view things. So I'm real excited to get to business with you today. Thank you.
SPEAKER_01That's we'll have to drill down on that 2% where we don't agree then.
SPEAKER_00I have to say that because in case either one of you said anything crazy someplace, like, oh, that's a 2% I don't agree with. I don't know what they're talking about. I don't know. I would say that we line up pretty well most of our thoughts on issues, is my perspective.
SPEAKER_03So, Scott, I'm super interested in the origin story. I mean, so you spent your 20s, as I understand, as a healthcare lawyer representing surgeons, surgery centers. So tell me how this all came to be.
SPEAKER_00Sure. So the origin story is really as follows. I was a young lawyer at my first law firm. The first law firm I was at was a firm called Kat Mishnah Davis, a great firm. And how law worked was at a big firm, a big law firm, you could divide it very simply into lawyers that had their own clients and those that did not. And this might be very crass, but it's very real. It's not one of these fake words of choice. If you were a lawyer at a big firm with your own clients, you had pretty good control of your life, just like if you have your own practice, your own physician practice. If in contrast you did not have your own clients and you worked for other partners, you're what's called a service partner. And back in the day, this goes back a long time ago, if you were um a service partner, you were treated essentially like a dog. And a well-paid dog, but like a dog. And the concept was if I was going to practice law, somehow or another, I had to build a practice. I never wanted to treat anybody poorly, but I wanted the control over my life. And the same thing that drives you towards independent practice, the perspectives of independent practice is to have some control of your life versus totally controlled by others. So this was back in the 20s. Can you guys still hear me? Okay, is connection okay? Yep, yep, absolutely. Great, great. So so back in the 20s, I was trying to figure out if I'm gonna practice law, how can I build a practice? I'd ended up being in a healthcare department, and that was a great thing because it was less about just being a litigator, a transactional lawyer, a corporate lawyer, a regulatory lawyer. It was more about you really worked in an industry. And I was about 28, 29, and I committed to being, I'll be in the healthcare industry as a lawyer versus necessarily a litigator or a corporate person or this or that. And the idea was that you really work closely in that industry, that vertical, so to speak. And then you decide in that vertical, are you going to really focus on transactions or regulatory work or litigation? I was a young lawyer. Of course, I really didn't know what I wanted to do, other than I needed to have control over my life. It back in the day, if you didn't have your own clients, it could be Friday afternoon, you could be 55 years old, and somebody would say to you, you have to get on a plane to go to New York for a client, and you had to go because you made a great living and you felt very beholden to it. It'd be like working for an employer for someone who gets control over your life. And so I was intent on building a practice. At some point, committed completely to healthcare. That was great because now I was entirely a healthcare lawyer, and I needed to figure out with where in healthcare I was going to build a practice. I started doing really as what you'd call today thought leadership, a very, very rudimentary newsletter, started hosting a very, very small conference, and that became sort of the very, very underpinnings of what became Becker's healthcare. But but that was 33 years ago. We have our annual October Surgery Center conference coming up, which is in its 32nd or 30 years, 33rd year, like Kevin O'Leary speaking at that, Anthony Ridders was speaking at that. But back in the day, nobody spoke at that. There were 50 people in the room. Now at our big conference, it might be thousands. At that conference is a smaller conference for us, more of a thousand people conference. But it's but it really was intended to be sort of in the middle in a network, sort of intersecting the middle of the healthcare world. So Becker's healthcare was very secondary to building the legal practice. About eight to 10 years into this, into doing newsletters and conferences, I started to hire people fully into that business, the media business, and we expanded into two additional areas. We expanded into the hospital and health system area and into the orthopedic and spine area. And that goes back about 20 plus years or so. And it was a little bit by a mix of strategy and a mix of necessity. Because at that point, we started to have a number of good people working with us. We started to grow. I was starting to move from just building the legal practice to thinking about building the Becker's healthcare media company. And what happened was this is one of the realities of building businesses, is you can't have too small a team, which means by necessity, we had to grow a little bit because I had to have opportunities. Like if you guys bring in partners in your practices, there's got to be enough to do. There's got to be things for them to grow into. There's got to be opportunities. Similarly, for me to grow a little bit bigger and for me to be able to retain great people, great editors, great event planners. We had to have more substance to the company than just surgery centers, which was great. We grew into hospitals and health systems, we grew into orthopedic and spine. I naturally thought, and a lot of this is, I think, one of the great lessons in business, I thought that orthopedic and spine would be our growth area because it was so closely adjacent to surgery centers. Of course, what really happened was, and it's obvious in hindsight, hospitals and health systems became 90% of what is Becker's health care. And it's obvious in hindsight, there's just a much bigger market, much bigger opportunity. This goes back a long time ago when there wasn't such information overload. So we were able to really cut out a path and grow a following in hospitals and health systems. But we were smart enough when we saw that opportunity to really double and triple down in the hospital health system area. Well, maintaining the earth feeding and spine area, the surgery center area. So our surgery center conference is in its 33rd year, our hospital conference may be in its 16th to 18th year or something like that. But it was fascinating. It's a real learning experience. But that's sort of the origin story. And the key parts of the origin story were following what's working, hiring great people, sorting out the people that worked with me. One of the people that started with me 20 plus years ago is a woman, Jessica Cole, who's our CEO and president, who was just a remarkable leader. When she started with me, she was a kid in college, literally. A few years later, I was still practicing law full-time, running the legal practice. She was really helping to run the 10 employees we had at the time. Um, and she was outperforming everybody. She was just running circles around everybody. And so at a relatively young age, we put her in charge of everything. Uh, and she really ended up really being the huge driver, the ride or die partner of mine in building that company, Becker's Healthcare. But that's really the beginnings of it. And then we've spent the last 30 years, plus living in the healthcare industry and following trends and what's going on in healthcare and watching it closely. And we find the industry to be fast. And when I made the choice to focus on healthcare, it was a beautiful thing. It wasn't from some altruistic concept of, oh my God, I want to help people. You always hear people give origin stories. And I'll shut up at any time you want me to, Dr. Coca and Dr. Jorge.
SPEAKER_03Yeah, yeah.
SPEAKER_00You always like I hear people give origin stories. Person who started a revenue cycle company always gives an origin story about my sister's third cousin's first wife died of cancer, and thus I ended up in revenue cycle. And of course, it's, you know, it's completely sort of like makes no sense. It's not really true.
SPEAKER_01Every med school application, too.
SPEAKER_00100%. 100%. So we end exactly. So we ended up really building these for a different reason, and then we grew into it. And but it was a great choice because then healthcare was 20% of the economy. I was like, okay, I cut myself off from 80% of the economy. This made my life a billion times better and easier. Because when I read stuff for business, I read healthcare stuff. If I want to read other stuff, I read it, but I don't have to. If I want to talk to people, like I don't have to, if I'm at a cocktail party, I am not doing business. If I'm at a healthcare conference, I'm doing business. But I'm able to turn myself on and off because I'm not constantly we're in a niche. We're in 20% economy, so it's a huge niche. But it was the fantastic decision. I mean, the best decisions I ever made were hiring great people. After that, it was picking like areas, so I could devote my life to areas versus being in everything. So that's sort of the origin story. And it was grown to be great fun.
SPEAKER_03Yeah, I mean, it's and you've I mean done an amazing job. Uh so what's the thrust? I mean, you've put out four podcasts a day. You have, as you said, you've run some of the biggest healthcare conferences in the country. Is the goal to be not the public square, but the the healthcare square in terms of where these kind of discussions that are gonna get us to where healthcare is going to be? Is that the goal?
SPEAKER_00Yeah, we view the goal as we view it in different ways. We view it as we have to be a magnet for listeners, for attendees, for speakers, for people that want to be involved in healthcare and know what's going on. We've got to be so good at creating both an intersection, a community for people to interact and talk and visit. We're a big believer. We use a concept teach and entertain, that we want to be teaching and entertaining in the very middle of healthcare, but we view it as teaching is almost a misnomer today. We're a big believer that people teach themselves and you provide the atmosphere and the environment for them to do so. Because at the end of the day, we're all very highly motivated, very highly bright people. I can't tell you something, but what you can do is come away more motivated and inspired to learn more. And I would say that's more the perspective that we have on this versus we're teaching you. We're providing an opportunity for you to network with people that have a perspective that are like you guys have been to our orthopedia and spine conference. If I have one real purpose in that meeting and the company doesn't always execute on this purpose exactly right, it would be a home for entrepreneurial physicians that are really interested in evolving in healthcare and so forth. Like that would be the purpose of the June conference that we've had you guys speak at, to really be a great gathering for people to talk and think about where they should be, what's going on, what are the opportunities. You know, if we're talking about our hospital system CEO, CFO roundtable, it's an opportunity for CEOs and CFOs to really hear from each other, learn from each other, see what's going on, think about what's going on, and so forth. We think when I started to write 100 years ago, like most people that start a media company, at some point you start where you're writing everything yourself. And so just to go come back to your point, Dr. Coca, is back in the day, I would write these long strategic pieces that I thought were very bright, you know, Harvard trains, all that kind of stuff. It's the first time I've said it in 10 minutes, so I think that's a win. But the point being, you would I'd write long, what I thought were thoughtful pieces, no one would read them. And what that led us to a long time ago, before TED Talks, before anything else, was what we call short form journalism. And so what we do is short form journalism, we're not trying to what we're trying to do is give you a quick sense of what's going on. Are things going in the right direction, in the wrong direction? What's happening in that part of the country? Are health systems laying people off? Are they closing units? Are they running into struggles? What's going on with surgery centers? What's going on with physician practice? We're not trying to, you know, if you want to go deep into something, it's not really us. Just like years ago, we decided we couldn't be the great clinical place. Like we're not a place where you're coming to learn about cranial surgery. We looked at that 100 years ago, but people do it so much better than we do it. We can't do that. What we can do is be sort of the Wall Street Journal of Healthcare where people get a quick sense and understanding of the business of what's going on in healthcare. And that's really what we follow and what we do. And we try and create opportunities for people to follow the conversation. But there's this concept over the last decade or so of value-based care. We have for a very long time thought that quote unquote value-based care is a managed care made-up term. And what happens is it's value-based care. And I'll just give you an example here. Like we want people to have these discussions. Like, is value-based care a real thing? Because, for example, if you're a doctor giving care to a patient and doing brain surgery last night in the middle of the night, and you bill for that brain surgery, I assume that you're giving value for care or you're providing care for value, regardless of how it's being paid for. You're providing care for value. Whether it's fee for service or capitated, it's care for value. And I think there's one of the great misnomers is that somehow or another, fee for service medicine is bad, but capitated or quote unquote value-based care medicine is good. And we just think there's got to be a lot of discussion of that because I just think it's wrong. But I also think there's got to be a room for discussion of it. One of my favorite public officials of the last decade or so is this guy, Barty McCary, who was running the FDA for a while. And Dr. McCarey is a very thoughtful person who wants to figure things out. Like he's not, he doesn't have a political axe on the right or on the left. In fact, he probably ended up losing his job as FDA commissioner because he wouldn't go far enough in some of the anti-vax mentality of some of the people on the right. But at the end of the day, he's a very thoughtful, thoughtful guy. He doesn't want to understand deeply are we doing two vaccines or not? And he's not against vaccines, he's very pro-vaccine, but wants to understand it fully. He wants to understand, is there a reason why there's so much more autism today than there was 30 years ago? What's driving it? He doesn't personally believe it's necessarily vaccines, but you've got to figure out is it food dyes, is it this, is it that, what is causing that? Because there's a huge difference in what there is. And our goal is to be sort of like he's hated by the left, hated by the far right. He's almost perfect because he's willing to just really try and understand issues versus trying to live by the platitudes of one side or the other. So at the end of the day, you know, we're trying to forget a forum for discussion. We're trying to find a place where people can teach and entertain and learn and network and hopefully not move the ball into like this concept of the Affordable Care Act. I know President Obama well. Affordable care act.
unknownGo ahead.
SPEAKER_02Wait, you just said you know President Obama. I was just about to cut you off, and you said you know President Obama well. How can I cut you off now?
SPEAKER_01So please that's just something you drop into a conversation there.
SPEAKER_00Well, so President Obama was in law school with me. I was the 30 year old when he was a first year. I was a student teacher, and I had 12 students in my class when I was a third year. He was a first year, him and this guy, Eric Posner, were both in my class. And Eric Posner may not be a name known to you folks, but his father, famous, famous law and economics judge, Richard Posner. And so I had 12 kids in the class, Eric Posner and Brock, who are both brilliant at a different level than I am smart, just literally a different level, not false immunity, a different level. So the two of them would regularly, well, we're running this class, it's a moot court type thing where people are doing their moot court project for a semester, and I'm leading the legal writing and the moot court teaching. And the two of them would say things like, I think what Scott means is this. I think what he's trying to say is this. And both of them were very gracious, very professional, a pleasure. They weren't trying to make me sound stupid. They were just explaining in a way I couldn't. And you guys are too young to remember what I felt like the Midwestern hick by Chris Farley on Saturday Live, as they're explaining to me what they're saying. And I'd be like, that's exactly right. That's right. But so I ended up knowing President Obama fairly well, knew him through his first campaign. My politics are different than his politics, but I liked him as a person. And he's a bright, gracious person, very, very overrated athlete. He played basketball with us in law school, not a very good basketball player. That gets a lot of press, but he was a horrendous basketball player, but not the point is the Affordable Care Act, the Affordable Care Act, the Affordable Care Act, the concept that we all want coverage for all. I think most of us believe that. I think most of you probably believe that, that we should have coverage for all. But coverage for all without fixing the supply problem is completely artificial, completely illusory. It's like writing a check you can't cash. So you have on the left people saying coverage for all. I don't disagree with coverage for all, but coverage for all without figuring out how we're gonna fix supply in our country is complete bastardization. It's complete almost immoral politics because it's meaningless to give coverage for all without fixing the supply problem that we have. And again, so damn the left for saying coverage for all without saying here's how we're gonna do it. Coverage for all, great, but without access, quality, and supply, it's meaningless just a political slogan. On the right hand, one of my least favorite political slogans a few years ago was get the government's hands out of my Medicare, which of course is ludicrous because Medicare, Medicaid are government programs. But you have a Washington that's broken on both sides. But so let me stop for a second, Dr. Coke, because I know you wanted to interrupt me a few minutes ago. And once I start going, I don't stop. But please let me stop and tell me what you wanted to say.
SPEAKER_03Well, so no, this is fantastic. This is great. I mean, that was I'm so glad I uh let you continue. How about that story? That's fantastic. So there's a lot to unpack there when you talk about, and I want to stay with that before going on to some of the other stuff I was gonna ask you about. When you talk about the physician supply issue. You bring up supply side economics, yeah. When you talk about the supply, physician supply issue. One of my thoughts is, one of my things that are firming up for me over the last 10 years or so, is that our constant demand, the idea that we have this massive demand that is uh the supply just isn't enough for, is partly driven by the fact that we have a third-party payment system that drives a massive amount of demand. And we have this not just third-party payment system that pays for services, we also have a third-party payment system that pays for what type of residence and in what location they get trained. So, and then on top, layer on top of that, in terms of this demand-supply mismatch, the fact that Dr. DiGiorgio, well, not Dr. Diorgio, we'll say some academic neurologists have neurosurgeons have told me, not Dr. DeGiorgio, that the academic systems are highly inefficient in terms of number of ORs that they run, right? We have one. We have one neurosurgery physician-owned ASC in the country. And their turnover is like triple what like it is everywhere else. They're all home by 2 or 3 p.m. So I think it is simplistic to say universal healthcare and just stop there at the slogan because as you so rightly point out, it's like, okay, well, how do you get there? And you're pointing out that, well, we have a supply problem. We need a lot more supply. But I think, I think it's it I would wonder what your thoughts are about the idea that we are never ever going to match our demand in an appropriate way with supply if we have this massive third-party payment system, which is constantly driving demand for services.
SPEAKER_00Yeah. You've got two or three different things that are going on. First, we've got massive health care inflation caused in large part by turning over a massive amount of health care to huge payers. So if you look at the payment system today, we've got this situation, just to give you quick stats, the average healthcare cost for a family for $30,000, $35,000 a year, median income for a family in our country today is $85,000. So those two numbers don't work. The healthcare system and the education system in our country have both been massively inflated through government efforts to turn over on the healthcare side. I'll stick to that for the moment. We've given massive government monies to huge payers, and that has led to huge humanitarian care and healthcare inflation. Four of the largest companies in America, number four and six, are united in the CVS, others in the top 20 by revenues in our country. Those are $400 billion companies a year, right after Amazon and Walmart in terms of size of companies. We've turned over massive dollars to healthcare insurers. This has led to a system of anything being paid for in the world with other people's money that generally leads to inflation. So we've led to massive healthcare inflation. And we've put ourselves on a spot when I come back to those numbers from a moment ago. $35,000 for family four were median income. That means half of all American families make less than $85,000 a year. So those numbers don't match up. So we're sort of stuck in the situation. We know that healthcare subsidies to big insurance companies for turning the system over to big insurance companies leads to massive inflation. And at the same time, now a family can't afford health care for the cost that it is because it's the numbers are out of control. So we're stuck in a situation where we now have to find subsidies for people to be able to afford the inflation that we are creating. It's almost like in our country we have a massive federal deficit that you can't tame inflation in our country ultimately without taming the deficit sub. I mean it very simple. We've got massive healthcare inflation caused by turning over massive government money to payers, and then we're stuck in a situation, a vicious cycle, where we've got to give subsidies to people to afford that insurance. There's not an easy way out of that cycle in any quick way. Without a rethinking of how we pay for healthcare in our country. Now, in terms of supply and demand, here's what I'd say to you on supply and demand is that on supply and demand, where you see it in our country is, I would say the concept of ever matching up demand and supply in primary care through primary care physicians, that's over. That war has been lost, and maybe rightfully so, but I don't know right or wrong. I love my primary care physicians, not a primary care physicians. We now turn out about 10,000 primary care doctors a year, about 10,000 primary care doctors a year retired. If you follow me, those numbers are and we've got a growing aging population. If you go to many states in the country, you can't get a primary care doctor without paying concierge. Now, a stupid answer would be to say, well, we have to create, and I don't mean stupid, maybe that's an overstatement, well, we have to create 100,000 more primary care doctors, we need to get 300,000 more primary care doctors. We're never doing that. In fact, the primary care problem is largely being solved by the fact that we're turning out so many NPs and PAs and primary care doctors that care is just moving away from the traditional primary care model. So when you talk about supply and demand to primary care, I'm not nearly as panicked as the Washington bureaucrats might be or the primary care societies might be. I think it's an issue that's being triaged and solved. Maybe imperfectly. We'd all like to have the old model where we had our own primary care doctor and it wasn't transactional. I just think those era is over. It's gonna be MPs, PAs, and primary care. That's all I think moving in the right direction. It is what it is between artificial intelligence, MPs, PAs, and primary care oversight. We're gonna be okay. Where I think we are not gonna be okay if I look at Dr. DiGiorgio in neurosurgery. And one of my nephews who passed away from a geoplastoma from brain cancer, you know, when you got past the second or third neurosurgeon in town, and there just weren't neurosurgeons, and we're in a big metro area that do cranial work because so many do spine work, not cranial work, but there is a shortage when you have a real problem, you find shortages. In oncology, the oncology world, a really close friend passed away of a melanoma with the eye. Once you get past, and it was his third cancer or so, but once you get past the third specialist in that area, and the one that he was working with was on vacation in Europe when he actually passed away, you see these very acute shortages. We have in our family something called Lent syndrome, which is oncology, a thing that causes lots of cancers. And you find very quickly that there's a lot of the best health care for certain things is outside the country versus in the country. So I think that when I hear you talk, when we talk about the supply and demand thing, I think the real acute problem in the long run is in subspecialties, which is unpopular in Washington because subspecialists make money and primary care physicians don't. So Washington hates specialists, but that's where the real problem, everybody hates specialists until they need one. You know, it's like this concept of minor surgery.
SPEAKER_03Take neurosurgery, takes take neurosurgery. There's clearly uh an amount of spine surgery that ends up being done. The neurosurgeons who will say the spine, the orthopedic spine surgeons will point to them and say there's clearly a number of surgeries that are done that may not be needed. And that's driven by the fact that commercial payments for spine surgery are quite impressive, uh quite good, relatively speaking. So the point is that there is demand driven there. The other point is say, and again, there's no perfect system, you're always gonna have some overutilization and whatnot. That's fine. But on top of that, again, this overutilization is driven by the fact that somebody else is paying, right? So there's one. Number two, the spine surgeons that are currently in existence are frequently tied up to health systems that are inordinately inefficient, where you've got a spine surgeon that generates $20, $30 million a year, or maybe a month, God knows how much they generate. But and the rate limiting step for them in terms of how many people they can operate on in any one given day is a nurse administrator that is making decisions on whatever preference cards and not allowing this, not allowing that. So, and then on top of that, layer on the electronic medical record that again the surgeon does not have control over, which is another bottleneck in terms of his workflow, in terms of turning over rooms, in terms of getting patients at the back you. So, what I'm saying, Scott, is that very I am fairly darn certain that our shortage of spine surgeons has a tremendous amount to do with those three things. And I don't necessarily know that we want to just this system and add in X number of more spine surgeons.
SPEAKER_00Yeah, I don't think that most spine surgeons think there's really a shortage of spine shortage. I don't think most of them think there's really a shortage of spine surgeons. Somebody's in Chicago and they need a spine surgeon, there's 10 to choose from. One operates on anybody's ever seen in his life, others don't. It's all over the board. Some are very thoughtful, some operate on anything they've ever seen. We say about podiatrists jokingly, if a podiatry if a person had 12 toes, the podiatrist would be doing a surgery on 12 toes. Excuse me for the noise in the background. But but you've got a situation where in terms of, I don't think there's a we turn out something like there's 900 orthopedic residency spots a year, there's 250 neurosurgery residency spots a year, there's 400 pain management fellowships a year. I think most doctors in spine and pain would say there's not really a shortage in spine and pain. I don't think patients would say that there's that much of a shortage either in spine and pain management. You know, and I would think that the professional societies still are happy to try and cap how many spine and pain fellowships there are in residence there are, because you've got orthopedic spine, you got neurospine, you've got a lot of people doing spine. In contrast, I would say in neurosurgery, cranial, I would say there are far more challenges in terms of finding the right neurosurgery for cranial work at the right time, far more challenges in oncology and a lot of subspecialties. So it really does depend what area you're talking about. And clearly, Dr. Coca, a ton of inefficiencies in the system as well. I mean, a ton. And it goes back and forth over time where the shortages in supply and demand are. So yeah, no, I don't think I don't disagree with you on spine. I don't disagree with you some of the premises at all. I think Dr. DiGiorgio, you would tell us huge short. I don't I don't think most spine surgeons don't view there as being huge shortages of spine surgeons, but I do think I do see huge shortages in other areas. For example, uh neurology is an area where I talk to a neurologist. There's one neurologist in Texas for 600,000 patients or people at a time when there's huge evolutions of dementia, Alzheimer's, et cetera. Like in the phone, you different areas, different specialties. There's much bigger shortages than others.
SPEAKER_01Well, I think this does come down to a basic economic argument, right? So we have basic demand subsidies for all of medicine, and then we have centralized planning where you know essentially CMS has dictated how much the different specialties should be reimbursed relative to one another by not just RVU valuations, but but DRG valuations as well and ASC, right? So that's all centrally planned, and that's why you have so many more spine surgeons than cranial neurosurgeons. I mean, as a neurosurgeon uh that is good at spine, you can make a lot more money doing spine all day with a much better lifestyle, right? I was up all night last night. I'm running about 30 minutes of sleep right now because I'm a trauma neurosurgeon, and that's something that pays less than a spine neurosurgeon. And frankly, the lifestyle is not nearly as good. You know, very few spine emergencies happen in the middle of the night if you're not covering at a trauma center. But all that comes back to the fact that this is centrally planned. You've had some bureaucrat decide that cranial neurotrauma or neurotrauma in general is going to be paid less than spine. And that's why you have this distortion where you have an over oversaturation of spine surgery, maybe, depending on how quickly you want your herniated disc taken out, and sometimes a dearth of cranial work and especially a shortage of neurotrauma, because again, the lifestyle is can be pretty rotten over a long term. It's not something that's going to really lead to longevity.
SPEAKER_00But we agree with your assessment of where the shortages are versus not for a lot of reasons, but basically 100%. I mean, I would agree with you 100%. I mean, we've created a medical education system that is antiquated. We create great doctors, but we do it very slowly, very inefficiently, very expensively compared to other countries. And we also are in a spot where you do have different economics that drive people towards spine versus neurosurgery. And so thus we end up with shortages of neurosurgeons versus spine surgeons. And you have a lot of those things. Absolutely, not even a question. I mean, it's a disaster, quite frankly, because when my nephew needed neurosurgery in the cranial neurosurgery, there were very, very few choices. And the guy like, oh, that guy's got great hands. That guy's great hands. As far as I could tell, the guy was a moron, excuse my language. And no offense, but there were very small choices. When my buddy died of cancer of his cancer, there were literally three uh subspecialists in the country that did what he needed. I mean, that's just those numbers don't work. And there's a lot of that. And a lot of his central planning, and a lot of his economics. And I'm not sure how you get out of that because one way or another, we're going to have some central planning. We're going to need more specialists. And I'm not sure there's an easy way out of that.
SPEAKER_03Well, Anthony, I'm super curious to hear about what you think, how you think. What's the perfect world here? There's a dearth of highly skilled, highly specialized surgeons. Is that driven by the number of cases that you need to become an expert? Or like or is it just primarily driven by revenue as you're talking? Reimbursement.
SPEAKER_01Yeah, I think training a neurosurgeon is training a neurosurgeon. You're going to need to have that many cases to train a neurosurgeon. But the problem is once you put all that effort into training a neurosurgeon, if you're going to offer 2x the salary at a much better lifestyle to go do T lifts and micro discs all day, it's going to be really hard to convince those freshly trained neurosurgeons that are closing in on 40 years old to go stay up all night every night doing thrombectomies and trauma cranies. Right. And so the incentives are a bit misaligned. I think what it really comes back to, and God, I'd love to hear your perspective on this, but coming back to physician ownership and independent physician practice, right? If I could own my own trauma center, uh probably lifestyle would be a little bit different in terms of how much I'd be willing to invest and the longevity I would be able to maintain with owning my own trauma center versus being an employee. And I know, Scott, you were involved early on in the formation of PHA. I'd love to get your thoughts on that. But a lot of this really, Anish, I think comes back to getting rid of as much of the third-party payment as you can and restoring that independent physician practice so that you know cranial neurosurgeon can have a good living for himself.
SPEAKER_03The thing I struggle with is this whole what do you do with when you have small populations that make it difficult to create a market? Meaning what Martin Schelee was talking about in the last episode, in terms of we've unleashed massive subsidization and third-party dollars for rare diseases now, right? Uh in terms of drug development. And yeah, I mean, that means that there's a ton of people that are rushing into that space. And of course, there's all these foibles that we talk about. But there's a lot of money that's heading into that space, and there's a lot of people that want to now create innovation for folks with osteogenesis imperfecta, where there's like, I don't know, a thousand people ostrogenesis imperfect, which is a very nice world to live in where you have people chasing that. Do you think that if you took away or lessened third party and if you had a lot more independent physician practices, you just get a lot more T-Lift type spine surgeries because there's a lot more back pain that ends up needing spine surgery?
SPEAKER_00I mean, I think I'm not sure if you're asking Dr. GiGi or myself, but at the end of the end of the day, you do have misaligned incentives 100%. You also have some real problems. For example, rural healthcare is a great example. We could throw those $50 billion at rural healthcare, and I think my perspective is most of that 47 of that 50 billion is going to be wasted because you can't really solve the car problem in rural areas, which is not enough population to provide enough Obigaines and enough people on site. You could find other ways to do it as much as possible, but you're also moving towards hub and spoke models in other ways. And you can't create physicians to live in areas they don't want to live in. You just can't do it. What we have done in our country, I do think one of the answers is medical education in our country. And it's just a very hard choice. I mean, you got to really want to be a neurosurgeon, a cranial neurosurgeon to want to do that because the economics of so many other opportunities in the world today, if you grew up when I grew up a long time ago, my parents were like, you could be a doctor, a lawyer, an accountant, or you could be disowned. Those were your three choices. Now people grow up and we got to get the best and brightest going to medical school. It's a hard path because so many of the best and brightest want to be in other areas because there's so many other alternatives. And we've created the medical education system, it creates great doctors and it's broken in terms of efficiencies. And I don't know how we get past that. Like when I was growing up, there were six-year med programs. People got out of high school, they went right to six-year med program. They were done with both by 23, 24, went to residency. So at least they were out by their late 20s versus today. In other countries, people go right to medical school and were the beneficiaries of that. In this country, they come here for residencies and they're actually out practicing by 2830 versus 32, 33, 34. So the cost of making the choice for the best and brightest to go to med school is not as hard a choice. Whereas here we've made it brutally difficult by making it very expensive. I talked to a young woman last week who's at Johns Hopkinson in her third four-year third medical school. She doesn't really want to be a doctor anymore, but she's got no choice because she's already $2,300,000 in debt. You know, and that's a horrible situation. It's, I mean, we'll talk about the healthcare inflation is similar to education inflation. People rail on the Trump administration trying to limit student debt. Student debt is the gateway towards education inflation because you've got people paying for education with other people's money. And it's led to institutions driving tuition costs through the roof for everything in a way where there's no cost-benefit assessment at all. Where if you limit student loans, people have to make hard choices. Do I really want to do this or not? Can I really do it or not? It's a very unpopular topic because people say, like, oh, if you limit student loans, you're making it harder for poor people to go to medical school. But what's really happened with the system is we've allowed the institutions, colleges, universities, medical schools to inflate the cost of school to crazy levels that are supported by these student loans that people then can't pay back. I mean, it's an insane, it's the same problem we have in healthcare, quite frankly. In my generation, I'm a little bit older than you guys, I paid my way through college, paid my way through law school. And you could say that, but it's an artificial comparison too, because that was before the massive education inflation. Do you follow me? I mean, it was, it was like I went to Riss Illinois for college, it cost nothing a year. I paid for it myself. I worked, I paid for it, but it was easy. Tuition was $2,000 a year. I went to Harvard Law School, tuition was literally $25,000 a year, not the 80 to 100,000 it is a year today. So it was easy. Summer Associate paid for a lot of it, was done paying for student loans by the time I was in my mid-20s. But we've created the same exact problem in healthcare that we've created in education, which is massive subsidies that led to massive inflation. And I don't think you fix part of the problem, the cost of education, the cost of healthcare, without starting to move away from the massive subsidies towards in the healthcare area, it's through the insurance companies, in the education world, it's through student loans that have led institutions to drive up the cost of tuition. But I don't think you move away from this without fixing some of that. I know that's not uh easy solutions, but it's where we've got to go to. Um, and then in terms of um, let me turn it back to you guys.
SPEAKER_01Well, I think we've had this conversation, I think, a few times on this show. And the point, and I'd love to hear your perspective on this, Scott, because you really do have a finger on the pulse of healthcare and the mood. But I think it's not only on the front end, but on the back end. You have so many doctors who, or even the med students, like you mentioned, who realize the lifestyle, sure, that the salary is going to be pretty decent, but the lifestyle being an employee is kind of rough. I was talking to a colleague uh just a couple days ago who he's only about four years out from fellowship and he's ready to quit. Uh, he's very highly trained, very highly in demand. He's getting offers from all sorts of other places to go work for them at more and more salary. But he's like, all these places, they won't give me the support I need. I don't get mid-levels. They put more and more clicks in front of me. I spend less time operating. I don't get adequate support staff in the OR. He feels like he can't do the surgery safe because they don't listen to him. So he's burned out after like four years. And we see so many doctors just exiting the field. Or you mentioned primary care earlier. They're leaving the third-party payment system and going to direct primary care, which I think is the probably the best solution for the primary care problem because it will keep doctors practicing longer. But really, when you have things like trauma neurosurgery or cardiothoracic surgery, these things are not going to move away from this large hospital setting and you're not going to be able to regain this sort of physician autonomy. And I think it's this lack of autonomy being beholden to the third-party payment system and large corporate systems that is driving so many doctors just to take the first exit they can. And just the last anecdote I have is I've met many doctors who have left clinical medicine and gone to consulting or industry, and not one of them has ever told me that they regret that decision and want to go back.
SPEAKER_00No, to give you the numbers on that, there's a million one hundred thousand physicians in the country, of which about 200,000 are now out of practice entirely. So you look at these numbers, amount of doctors compared to population, people quote the number of million one. The real number is about 900 to a million, 900,000 to a million for 350 million people in terms of that supply-demand curve. Autonomy is a huge part of life. You know, people enjoy their lives a lot more when they're self-determinate. But when we talked about building a business, building the media business, building law practice, it was because I wanted to be self-determinant to have my own flexibility and autonomy. I couldn't agree with you more. You have this very real challenge today of there's multiple things. You've got people coming out of med school. A huge percentage of those want a job versus wanting to own a business, but just a different group coming out. And in the specialties, it might be more tilted towards people still wanting to own a business. Orthopedic surgeons still want to be more and more in independent practice. We've got a cardiology practice nearby that just went concierge. You've got lots and lots of in the specialties, one of the saving races for surgery centers where I spent a lot of my time over the years is a lot of the specialists, gastroenterologists, ophthalmologists, orthopedics, pain management are still pretty independent. But in a lot of specialties, they're not. And a lot of the demographics coming out of school. If I went back a generation ago, a lot of physicians came from the military. They were immigrants, they were happy to go anyplace. They wanted independence, they wanted to make a living. The generational change towards I just want to have a job versus having control has changed that a lot too. So you've got a percentage of physicians that really do want this independence. They drive towards it. The other thing I would say is that when you talk about burnout, like I look at the world, well, the primary care doctor is a great example. 30 patients a day. I mean, that's just brutal, whatever the number is, it's brutal. And getting paid per click 100 bucks a patient or wherever the number is, not even anywhere near that, but just brutal. And then you look at things like oncology, the information overload combined with the amount of time a patient needs in a very difficult situation, it's an impossible situation. It's literally impossible. So it's a prescription for burnout. I don't know an oncologist that's not burnt out. I know plenty of orthopedic guys that are doing knees, doing shoulders, they're doing 13 other things, they're playing golf and tennis till some, they're making good living, and they seem to be pretty happy. Not all of them, but a lot of them. But depending on what specialty you're in, it's just can be absolutely brutal.
SPEAKER_03Uh it would be kind of dense of me not to kind of talk about the moment that we're all sitting in, the context that we're sitting in. And we've gone from Ronald Reagan's uh kind of famous words about the nine most terrifying words in the English language are I'm from the government, I'm here to help. And that kind of follows up on what you're talking about in terms of healthcare inflation and many things, education, right? So when the government steps in to try to help, starts to subsidize, you massively boost uh the prices of things, and the people that are really making money are kind of rent seekers, right? We've created this like parallel universe of uh essentially sophisticated welfare queens, I think, whether it be in the university system or whether it be in the healthcare sector, right? But that interestingly has spawned a movement to push back at private actors or private subsidized actors that are doing this, right? So you have Zoran Mamdani in New York who is leaning into those words and saying the scariest words aren't I'm from the government and I'm here to help. The scariest words are I'm from the private sector and I'm here to help. And you know, he points to consolidation and private equity as being the real predatory forces, and it's them that are raising your prices. And guess what? If they're raising your prices, guess what I'm gonna do? I'm gonna control the prices, I'm gonna control rents, right? And that has so yeah, what is the how do you and there's certainly you can see why it is so popular among folks, among young young folks that are trying to look at these prices in New York in terms of trying to stay in a rent a place, and it's like, well, okay, yes, we need that. And there's of course that that extends to healthcare as well, of course, right?
SPEAKER_00Yeah, yes, yes. And I'm not sure how do you get out of that. What I do know, like when people complain about our healthcare system, and I'll use this to lean into the discussion on Dr. or Zaron Mandani versus Ronald Reagan. And when people complain about our healthcare system, our healthcare system is challenged, and there are challenges, but it is fantastic compared to the rest of the world when you look at it this way. And give me a second of this. When you compare the US to other large countries, any other country with 100 million people or more, or even 50, 60 million people or more, we do ultimately a really good job providing a lot of health care to a lot of people. And so, and you compare this to China and India that have a billion and five people, they're in an impossible situation. And it was shown very clearly during COVID, they're an impossible situation. China had to close down because I know enough nurses and doctors to take care of people. India got overrun because there's no nurses and doctors to take care of people. We are fortunate in our country to have lots of doctors that come from India and China and move here after med school or residency or later. Thank God that they do. But those countries are overwhelmed. If you look at other countries, Nigeria, Canada, England, I don't want my health care in those countries for a million different reasons. It's not compared to the rest of the world. We have an incredible standard of living. You cannot compare us to a country with five million people and say, look, they do it right. That's just too easy. That's that's impossible. That's an impossible comparison. We're taking care of 350 million people and imperfect, but doing a very good job. It's the same thing with the Smond Domini thing and the socialism thing. Everybody's a whiner today. And I don't mean that in a bad way. I just think it's the reality of it. We have a situation where our standard of living for any large country in the world for our poorest people is a ton grit better than it is for almost everybody in the other large countries in the world. Like our standard of living for our bottom 10% is better than everybody past the top 10% in China, India, and a lot of other places. Do people follow that? I mean, when you talk about other large countries, so at the end of the day, it's imperfect. The engine that creates a lot of that, the solutions in healthcare, the things that are going well in healthcare right now are almost all private industry driven. And I'll talk about that in a second as well. So, I mean, we're never getting out of governments in healthcare. I just don't see it in our lifetime. I don't see it. But the things that are going well and taking strain off the system are almost all coming from private enterprise. So this idea that private enterprise is the problem or that wealth creation is the problem is a spoiled kid mentality and a stupid mentality where we've got to find a way to teach people what the reality is. Go spend, if you're a person who's a poor family or rich family kid in New York City and you're voting for a Mandami. I mean, people say this jokingly, go spend a year living in India, China, and not part of the people that own the country. Try living in a poorer community in those places and see how it goes. Try moving to Nigeria, try getting your healthier in England, try even getting it in Canada, quite frankly. And it's at the end of the day, it is imperfect, but we've got the best of a lot of bad systems by far. And the proof is that we've created this. Go ahead.
SPEAKER_03I think I'm telling you that it's going to come across as Marie Antoinette. It's going to come across as this let them kick thing in terms of the fact simply say telling the AOC, uh, the bartenders that are working in New York City that you're making $30 an hour, which is insane compared to what anyone is making in Nigeria or India. But they're mean that's $60,000 a year or $70,000 or $70,000 a year. That amount doesn't go very far in New York City. It's all relative to everyone else in New York City, right? Like the person, the AOC wants to go to a nice sushi restaurant just like the rich kids could do. And they're going to struggle to do that. So I really think, Scott, unless we figure out how to like so I'm going to push you on this. So the question is how do we fundamentally you said you've said it. I mean, government subsidized subsidizing healthcare is why healthcare inflation has gone up so much. But why are we giving up and throwing our hands up at, okay, well, there's nothing else to do about it? Because I'm telling you right now, unless we do something about it, we're going to get it. I think you're right. No, no, you're going to have a revolution of shorts.
SPEAKER_00I agree with you, Dr. Koga. You've got a situation where government subsidizing education has led to massive education inflation. Government subsidizing healthcare has led to massive government subsidization. And so I'm not sure how you get to the spot of you had a situation for a very long time where we had an expanded economy, expanding economies, so there's opportunities for everybody. Now you've got a very false expanding economy because we expand the economy through lots of government debt. We do it on the right, we do it on the left. The Republicans do it just as badly as the Democrats do it. Nobody wants to cover government spending under their watch. Nobody wants a recession under their watch. So at some point, we either are going to lose our country to this, or we're going to have adults in the room that start to slowly reduce the amount of government spending so that we could sort of get ourselves to a spot uh where we're not inflating everything where there becomes an opportunity for people to grow again in our country. I think it's a real problem, Dr. Cook. I don't I don't see the answer to that.
SPEAKER_03So to make that I think the reality is from from To make that concrete, just to just to follow up on that, to make that concrete, if we, for instance, actually go through with the 340B reform, if you actually go through with and the site neutral payment is relatively tame, it's only topping imaging, but say we go through with that, say we go through with site neutral payments for procedures, right? Uh my goodness. Uh that, I mean, you talk to hospital CEOs and there probably isn't anyone who talks to more hospital CEOs than than you do. I mean, that sends shivers down, I'm sure, health system CEOs, correct?
SPEAKER_00If you kind of go after the case, yeah, I mean, health systems, health systems, to health systems are running massive enterprises with massive challenges. We've got this again, like many of these things. We've got a quilt work of payment systems that try and make the healthcare system work. I mean, it's a very sort of quilt. But can it happen systems?
SPEAKER_03Can we can we do this without failure? Meaning the what'll put the pushback will come saying we're we're gonna fail because our numbers don't work without the extra payments, right? Like, and the insurance companies, you saw them saying this, or not the insurance company. Well, in terms of the subsidy for the emergency relief. Anytime any money is running out, anytime you do go to cut something, it's like, oh my God, we're gonna have catastrophe. My point is, do we, is it okay? I mean, you're and you're uh again, as a guy that talks to folks all the time, as a guy who understands the pain that would cause. Do you think that's a reasonable approach to take? Or is there some controlled destruction that needs to happen? What would you do it? Because you agree that we need to take the money out of the system. How do you do that in a way that doesn't have all these health systems collapsing? Or is it okay for health systems to collapse, perhaps?
SPEAKER_00It's probably not okay for health systems to collapse because they ultimately end up serving as our safety net for our country for so many different reasons. So seeing them collapse, I think, is bad. The flip side is like when we talk about them taking what the number is a trillion dollars out of Medicaid, they're not really taking a trillion dollars out of Medicaid. It's like so much of the false discussion here. They're reducing the increases in Medicaid compared to what they thought they were gonna get. So much of this, you know, the best CEOs that I work with, and I've worked them for a long time, do a really good job of filtering through a lot of the noise out there and run their operations to provide great health care. So the best of the best, like when there is so much noise every single day that CEOs have to deal with, just like you have to do it, deal with in practice. And the very best CEOs, yes, they're cognizant of it, but they're trying to rate run great systems, they're trying to make their systems work, and they're constantly at it, and they don't lose as much sleep over a lot of this stuff as all the media would think that they do. I don't mean to overstate that because obviously you go through periods of time. There are so many different examples here. I don't know where to go with it, but a couple of years ago, health systems, some of the health systems in New York were losing crazy amounts of money for a period of time, and then at some point they rebounded some. And it's kind of it, there is going to be a constant, I wouldn't call it, I don't know if it's creative destruction or necessary destruction, but there is gonna be a constant kind of measurement of it because we know that our system is out of whack. But we know, for example, as a nation, if we're bringing in four to five trillion a year, but spending seven trillion a year, it artificially inflates the economy. Everybody feels good for the moment, but we know it doesn't work long run. And probably in healthcare is a microcosm of that, of the $27 trillion a year health economy we have, $5 trillion a year is spent on healthcare. Is that right or wrong? I don't know. But certainly there's some number that we want to keep it within. And I think what happens with these things is if you're a health system CEO and you cut 340p, you cut site of service, you obviously want that done carefully because hospital margins are running at 1 to 3%. And for 40% of health systems, there are no margins. So you want that done carefully, but a lot of this ends up being it's people don't, we really don't see how a lot of these things work out until they happen. And then at some point we make adjustments. And so the 340B thing, I mean, so many of these things that the levers get pushed by the big payers, and that's also a big problem, which is so many of the levers get pushed. So, for example, when you see Washington and DC in Congress, the payers and the government arguing with each other, but this is like frickin' frack arguing with each other because the government's the one that's provided the insurers the massive subsidies with the intent that the massive subsidies would control costs and deny care. And so when Washington yells at them, it's obviously comical because they're the ones who exactly provided those subsidies to the managed care companies. Uh, when you look at this, when you periodically see some cuts throughout the system, you know, it's the same thing on the physician side. When you see cuts in physician income, you know, obviously I view it as we have a huge shortage of physicians. So we shouldn't be cutting physician income at all. We should be increasing it because we want to make it more encouraging to be a physician and practice medicine. But a lot of this, I think, Dr. Coke, it's gonna be if they're gonna do some cuts in different places, we're not gonna know a lot how they play out until they play out. Because most of the government calculations over the years have been massively wrong. So, like, for example, medical advantage. Half the population has a medical advantage. The idea was it's gonna save us money. We're now spending 500 billion years on medical advantage. It's costing a lot more than expected. You follow me? So the only thing you get with certain from the government is massive miscalculations. Similarly, you get the situation where 100 years ago they added the home health benefit. The home health benefit was projected by CMS, Department of Health, and Healing Services to cut a ton of cost because we need to get people out of hospitals early. And what it led to was hospitals getting another bite at the Apple. They kept the patient, then the patient went to home health. They own now home health. And so it caused a massive increase in cost. And so the one thing that's for sure, there are so many good things going on in healthcare that are off but that are all coming from my perspective in the private enterprise system, which we can talk about on a different podcast. There are things going right and moving in the right direction. If we quash private enterprise in healthcare, it will be an absolute disaster. Because the things that you were not right that are moving in the right direction.
SPEAKER_03So you're not a fan of Lena Khan and Mark Cuban, who are very much into the government stepping in and breaking up health systems or whatnot. Is that what that means?
SPEAKER_00Yeah, I don't think there's an answer. I don't think it's the answer. I don't know. What happens with Mark Cuban? I love Mark Cuban. He's got his own very clear trying to grow cost plus. I love Mark Cuban. I think he's a great American entrepreneur, great driver and energy. I hope he's 67. I hope at his age, I have his energy and drive. I love Mark Cuban. I actually love the guy. Do I think a lot of things he says, I agree with? I disagree. It's like you guys could say some stuff. I'd put him in the same category as a lot of things that you say. Like you guys bash on hospitals. I really don't bash in hospitals. So I agree with you guys on 98% of what you say. But Mark Cuban's probably similar. Wena Khan is a true believer in also insane. And so I don't do I agree with some of what she says. I disagree with some of what she says. Obviously, I do think in our nation, having the ability for small businesses to thrive is very important for a country to maintain a democracy, and people feel like they own part of this country. They own their own lives, they own their own stakes.
SPEAKER_03So when Liena Khan talks about breaking up the Amazons, the other things that we're gonna do is Lien Khan is also very much against mergers and acquisitions because she feels that consolidation is what's raising, raising costs. Your take on that?
SPEAKER_00Yeah, it's a complicated thing because certainly consolidation has cost some inflation in some places. The great game of consolidation for a long time was we want to be big enough in a regional area that payers and patients can't go around you. That was the concept of consolidation. So clearly led to some healthcare inflation. The flip side is to run the systems we have today to deal with the risks, deal with the challenges, size is not unimportant. You know, we're not going back to a country of 10,000 hospitals, each do $100 million a year in business or $40 million a year in business, nor can we with the sophistication of so many things that are going on. So I don't I mean, she might be half right, half wrong. I don't know, but it's uh but I don't think we're I don't think like breaking up the big health systems is the answer to anything. Just like I don't think paying doctors less is the answer to anything. I just don't, I don't see that. I see so many of the right things that are doing on healthcare. The hospitals provide a critical safety net for our country. We need more doctors. The things that are going right in our country are so many of the technological innovations. The telehealth, what what's happened overnight is 20 to 30 million patients a year are getting their GLPs outside of the traditional health system. And it's not so much that GLPs are great or good or bad. The fact that 30 million patients a year now are doing it without having to deal with the health systems, without having to deal with the physician's office, is just a huge taking of strain off the system. It's a perfect example of private enterprise working, but the cost of GLPs is going down dramatically. This is just, but it if we quash private enterprise, all these things that we didn't think would be answers. If you would have told me five years ago that GLPs would be down to 200 bucks a person or 300 bucks a month, whatever it is, compared to the thousand bucks a month they were, because we because insurers won't pay for it. So it forced a free market solution. And if you would have told me 30 million people would be on them and they're getting their care without dealing with health systems or doctors' offices, if those people were dealing with doctors' offices, those doctors' offices would be even more overwhelmed than they are today. So there's so many things that are going right. Most of them are private enterprise driven. Now, whenever Medicare or the government says we're going to do an innovation program, well, you have a bunch of, you know, periodically you get a guy, Dr. McCurry, I think is one of the brightest guys in the game. Largely you get a bunch of bureaucrats doing investigations or ideas or innovations that are like 10 million times behind what private industry does. So, you know, Lenicon is complicated. I don't, you know.
SPEAKER_01I want to I want to push back on a few points there. And but uh, you're right, we do agree 98-ish percent of the time. I actually think I am unfair to hospitals, and I'll be the first to admit that sometimes I do bash them a little bit too much. I agree with you that hospitals serve a critical role. Uh, they are safety net functions, trauma center, all that. But these large consolidated systems that make more income from playing the manipulation of the coding games and the 340B games rather than maximizing patient care, the ones that really do burn out the doctors, those hospitals, if they are starved of a bit of revenue, in your view, Scott, do you think that private enterprise would pick those up? Because they're quasi-governmental institutions at this point, right? A large hospital system, estimates I've read get 70 to 80-ish percent of their revenue from government sources. So if they're starved of a little bit of that, do you think there's a way in which private industry will pick up that demand? Because the demand's not going away. And so, Will, to your point of you're not going to go back to 100,000 hospital systems or independent hospitals, is there an avenue for that? Subspecialty shops, uh, physician ownership, things you've done at PH?
SPEAKER_00All those things would be great. All those things would be great. I think what's happening right now is we're going through a phase of innovation in healthcare, in a way, one that many of us didn't see coming, where a lot of things are actually going in the right direction, almost all outside of the government. And that's not a knock on the government, it's just the reality of it. I don't have a real opinion that somehow or another breaking up the health systems is part of the solution. I just don't see it. What I see as a solution is not quashing private enterprise because all the great innovations I see going on. Nursing education is a fantastic example. Four years ago, people said we're never gonna have nurses in our country. We're dead in the water, went from 5 million to 4 million. In the course of no time at all, we started again producing 200,000 nurses a year. We enforced another 30,000 a year, we totally replenished our nursing supply. It's imperfect. We still have a lot of nurses that don't want to do inpatients, don't want to do other things. But in general, we did this incredible job over a three to five year period, not driven by the government, of figuring out a way to solve the problem of educating nurses a lot quicker. And it's been an amazing transformation in our system and a critical one. So we're back to about five million nurse track nurses. We produce more CRNAs a year than anesthesiologists a year. We produce 200,000 nurses a year and only have 23,000 doctors starting a year. You know, to your point, the more things are tied up in huge bureaucracies, the more challenges we have. Clearly, breaking up health systems, I just don't see it today as the answer. I see the answer really is how do we continue to foster outside of the government all this innovation that's solving a lot of problems that I just didn't see coming a few years ago?
SPEAKER_01Well, I look at more as taking a lot of these revenue streams and making them more available to private industry, right? So why should the large consolidated hospital system have the only access to facility fees and 340B and in a lot of states their dish payment, their uh dish payments and state directed payments, right? Why not spread those out a little bit more so either, you know, ideally for my libertarian mind, take them out of the government, but at least make them available to more private industry.
SPEAKER_00Yeah, I think that's fine. I mean, with the problem with where wherever it goes, wherever the government's deciding to allocate the money, I mean somebody's winning and losing based at the government's hand, whether it's health systems, whether it's in others, and so like this $50 billion rural transformation act is a gold rush for a lot of companies going after that and health systems going after that $50 billion. I see it having like, I don't know, I'm a pessimist on it. Whenever the government throws money at a problem, I mean, I'm just a pessimist on it that it's actually going to lead to any positives in rural health care. You know, but it doesn't mean that a lot of people aren't gonna chase the money. I mean, it's we're it's happening. So I just I don't know. I don't I don't have a great answer to your question, Dr. Gi Giorgio. I think that I think that what I do see is so many innovations and things that are going right. And there are a lot of them are coming out of the private sector, not out of the government right now for healthcare. And so I do think that's right. I do think there's no question about it. And the government's been largely broken in terms of solving healthcare problems. Scott, are you?
SPEAKER_01I don't think there's any question there.
SPEAKER_03Are you you're still active, you practice full-time law? Is that right?
SPEAKER_00Yeah, no, I really don't. I'm I'm still a partner in the law firm, but I'm what you would call sort of a partner. But I stepped down years ago from being a true partner. I spent a lot of time with the law firm, I spent a lot of time with Beckers Healthcare, I spent a lot of time with some other initiatives and so forth. But yeah, I don't bill hours actually like I did at one time when I was really grinding away and growing a practice. Like if somebody says to me today, I really want you to handle our deal, I would say, well, that would be dumb because I don't handle deals directly, nor do them in the way that I could when I was 20 years ago, when I was in that's what I did every single day. It's like you wouldn't want a neurosurgeon who's a part-time neurosurgeon or who's doing it a little bit. I mean, you just can't. I I still am very good. I talk to clients constantly about strategy and what they're doing, what they're looking at. I work really closely with my partners, but I don't really practice law in the old day traditional sense. But you can't, you just you can't do it right at Maguire at the level that it had to be done when I was doing it.
SPEAKER_03Maguire Woods, they spend, they're like one of the leading law practices when it comes to acquisitions, mergers, false claims. Yeah, it's a it's a great idea. I mean, well, they have a healthcare focused, right?
SPEAKER_00Or they're not, or they all we have a healthcare focus, but it's a it's a large, large firm. And the firm itself, a billion dollar a year firm or plus, these are all published stats. It's one of the MLA top 30 or 40 largest firms in the world, maybe 50, whatever the number is. It's a large, large firm with great, great attorneys, great, great people. I've been there forever, literally forever. You know, I our firm merged into their firm 20 plus 25 years ago. Just a wonderful place to practice, wonderful people. But I don't practice full-time in the way that I did when I was, you know, closer to your guy's age. You know, and literally when somebody, you know, people ask me to handle their deal, I'm like, well, I don't handle these people.
SPEAKER_03But your perspective is of somebody who was deep, deep in the weeds of acquisitions and mergers and whatnot.
SPEAKER_00Oh, 100%. And and of health law. Of health law, more than health law. Like I wasn't doing like we, yeah, we we've worked with surgery centers, independent practices, we've worked with big health systems, we've worked with private equity investing in healthcare. I mean, we've had a perspective on all of it. And it's not, oh, it's not like I I certainly was a believer in the studies that showed that lots of consolidation of health systems led to healthcare inflation. I mean, it was one of the many things that led to healthcare inflation. The game, regional health systems outperformed independent hospitals by a huge degree, in large part, enough resources to recruit, enough resources to invest, and enough resources to be the goal of being a great practice. If you want to be a great orthopedic practice in the state of Illinois, the goal is to be so good that it's hard for patients and payers to go around you. That the payer has to be in network with you. You follow me? And that's why you've seen the growth of mega orthopedic practices, mega other practices, good or bad. But but it's a very similar thing. Big regional health systems, the goal was you had to be big enough to be able to take chances to invest in things, but you also had to be big enough that it was very hard for a payer in your area to go around you or for a payer not to have you in their network. And that's not, that's just reality. That's the reality of the business. But for a typical payer, the health system was responsible for about 30% of their cost. So they were the most important supplier in that area to that health system. So you had a very synergistic relationship, some fights periodically, but between health systems and payers, because the payers are quite dependent upon the health system. And the goal of the health system was to be big enough and large enough that it was hard for a for a payer to go around them. How?
SPEAKER_01So that's I think gets to one of the core issues we talk about, Anish, that the the customer ultimately isn't the patient, right? The customer is the payer or the government. Right.
SPEAKER_00Right. Yep, absolutely. How do you think that's a good thing? Well, and and this is why there's so one of the reasons why there's so much healthcare inflation. When when you've got when anything's being paid with other people's money, you're always going to have ridiculous inflation. You know, so you see practices moving back and back towards, you know, as on the I would at a podcast say with a spine surgeon who's moved to completely out of network, no payer contracts, and so he's got to do business with patients paying directly. You know, and that causes patients to decide, am I paying for this? Do I want to pay for this? Does it make sense? A hundred years ago, our family went through their fertility effort, and it was one of those rare places in healthcare where you're really paying for it as a consumer. Like you really had to make a choice on who you're using as a fertility specialist, and it was expensive based on what are the results, what are the stats look like, and so forth. And I'm a fan of it, but I don't see it being a spot where price transparency overall good, people paying for their own stuff overall good. Big ticket cancer, big ticket neurosurgery, big ticket other things, big ticket cardiology. It it's unlikely that's going to direct consumer spend other than for the richest people in the country. So price necessary I don't think it's necessarily the answer. It's probably helpful, probably, but it's at the end of the day. You know, we're not moving to a consumer situation where I'm going to pay for cancer cure. Yet we have a family member who goes to Germany for vaccines. I do pay for those out of pocket. The good news is it's a lot cheaper than it than it would be here.
SPEAKER_03So you maintain perspective despite being being on the inside of acquisitions, consolidations, actually. You maintain you're able to maintain objective perspective of the fact that, yes, consolidation does drive cost, right? But uh how does Becker's the me you know, the the media arm that you've you've created, how do you avoid being captured by the folks who fund the Beckers media empire, right? Meaning Yeah. You know, like I like I've I've been writing the last few months with the whole McCarry Prasad uh Hogue uh situation about how poor the media coverage that is supposed to cover the FDA and sciences, and that's clearly largely driven by the fact that there's a fair amount of pharma funding and they're very that's a very tight relationship that the media that covers the FDA has with the pharmaceutical industry. How does how does Beckers do it? How does Beckers is Becker's have some type of a ability to kind of stay cover it? Because you're doing journalism. How do you manage to do journalism?
SPEAKER_00No, we we have we we we have we have 33 full-time writers journalists, 33 full-time writers and journalists. And what happens is we were very clear from the get-go. We're not in the investigative journalism business. So I largely say what I want to say when I want to say it. I don't cover the FDA closing or live with the FDA closing. I've gone to Denomark Dr. McCurry over the last decade or so when he was at Johns Hopkins and then at the FDA. So I have a very clear perspective on Dr. McCurry that's very unpopular with some people, but I love him. And I think Highway found it. In terms of the journalists, we can't control what the 33 journalists say. But also somebody published the other day, here's the highest paid CEO. Whenever we publish the highest paid CEOs, the CEO audience doesn't love that. I mean, that's not something our audience loves, but we publish it. And I can't tell my journalist not to publish it stuff. We don't spend our time, like we don't spend our time generally. Our business has never been our audience is hospital CEOs and leaders, it's surgeons, it's others. We don't spend our time trying to bash that CEO who did this. It's just not our, it's not what we do. It's just not our business. But we also like what people cover this malpractice case against that pharmaceutical company or this or that, whatever it is, we cover it. We don't and we don't go on and on on it. When a physician says to us, no, you covered my case, and that case was six years ago, it's since it's been dismissed, would you do us a favor and take the coverage off of your system and take it off of the internet, or at least from the Becker's healthcare stuff? We're generally sure, we're happy to. I mean, if the guy raped somebody yesterday, no. But if the guy got accused of something wrong 10 years ago and it was covered, and he says, look, this is making it hard for me to make a living now, because it's still showing up throughout the internet world, would you take it down? We're often generally happy to. We do our best. I mean, I can't, you know, it happens in the journalism world. I'm the publisher, the founder, I'm still an owner, I'm still on the board. But if I tell my people every day, don't say this negative about United, don't say this negative about CVS, don't say this negative about that, my people won't listen to me. They quit, they go elsewhere. And so then we talk about the payers incessantly. I mean, you know, we used to joke that a chief medical officer's job was very easy at a payer, they had to learn to say no in multiple different languages. And I say that jokingly, you know, we do the best we can, but we're also not the New York Times. We're not investigative journalism, never have been. So we try and I don't know.
SPEAKER_02Yeah, that that's great. I mean, you try to do this to publish.
SPEAKER_00I try and have you try and have a light touch with our journalists. And if I don't, my journalists want to kill me. Like periodically, someone who's a friend will get lambasted in it. And I've been like, do we have to write that? Can we ease up on that a little bit? Can we at least major coverage? Can we stop? But I try and do that very, very often because it's something that my journalists would kill me for. Do you know what the politics are of your journalists? Uh they're all over the board. We we try and we try and be as apolitical as possible. We just try very hard.
SPEAKER_03In the course of hiring or interviewing, does it does it come out?
SPEAKER_00We don't interview. No, no, not at all. Not at all, not at all. During the COVID period, during the COVID period, every single day, I would get some disgruntled reader that would say, This writer wrote something, and they're obviously, I would say, if you have 30 young journalists, 33 young journalists, whatever the number is, they're probably going to tend politically to be like most younger people are, a little bit more, they're all over the board. But but I would say, like during COVID, we would get complaints every single day from somebody on the right or the left that thought you covered it the wrong way. You follow me? You're obviously an unabashed progressive, this, or you're a conservative, this. Oh, and we'd be like, we're doing the best we can here. And we try to be as nonpartisan as possible. We try not to be, we try very hard not to be Fox News, not to be MSNBC. We try very hard to encourage our journalists. Oh, they're not everybody's got opinions, everybody's got biases. We try not to be the place for everybody to run their biases through every healthcare discussion. And my biases may run different than a lot of their biases in terms of what they think. And so the last thing I want to do is impose my biases on their writing. And you know, we try and keep a really light hand with them, and they do a really good job. They understand that our goal is to be covering healthcare, not to be partisan. All right. So it's not to be social justice.
SPEAKER_01That's very noble and impressive.
SPEAKER_00We try hard. We try hard. And at the same time, we try not to like, if somebody in one out of 10 pieces, they write, the people are writing several pieces a day. They're covering a lot of stuff. Oh, and periodically a bias will come out one way or the other. And we try to largely let it be. I try not to, I try not to be like, oh my God, I can't believe you said that. That's this, that's politics. No, my politics are not the pro-Mandami politics. They're just not. But I'm not gonna go through my journalists and say, no, you covered that nicely about New York doing this. You can't do that. I'm just not gonna touch that. We're just not gonna do it. We're just don't like life is too short. And most of this stuff works itself out. We we have 33 journalists that overall I think they do a great job, imperfect, but a fantastic job. I'm so proud of what they do. When I need to find my healthcare coverage, because I'm giving a speech, I'm reviewing what's going on, I want to get a sense of the news. I still go to Becker's healthcare, which is the biggest positive. And I've been in this for 30 years now. And there's been periods of time where I've not loved my journalist team, journalism team like I love it today, and not good or bad, where I'm like, the quality of it at different times over the 30 years has not been where I want it to be all the time. I think it's overall great right now. I love it. And I don't see a huge amount of bias. And we certainly don't try and we try not to be Fox News or MSNBC at all. We try not to be either. We try to cover healthcare. The audience, the audience, we would have people during COVID that would write one thing about something. And of course, everybody lives in their own world. And so they couldn't believe the amount of stuff they got back on the other side of the issue where people were just offended by what they wrote. You follow me? And it would be often somebody who just really perceived that the administration at the time had it right on what they were doing and couldn't believe people didn't agree with everything. And we had people that would write back from all parts of America that had a very different perspective. You know, it was very helpful for me to show that to our writers to say, you might think this, but you gotta understand our country. These elections by popular votes are 50-50 elections, they're very close to it. You know, so if you are in one side of the equation and think that everybody thinks like you, it's just not the reality in our country as a whole. And so we tr we try to be, you know, this is we try not to have a political bias.
SPEAKER_03Yeah, this has been a fantastic uh discussion. Thank you so much. Uh you know, I uh we have to No no no no no no absolutely not.
SPEAKER_01You have a uh No, I was gonna say we have to have you back on.
SPEAKER_03Yeah, that's a I was just I was about to say the same thing. So we'd have to have you back on and uh we can discuss any number of topics. My goodness, you're you know look even more loquacious than I thought you were, which is with tons and tons of information. I love it.
SPEAKER_00It's a total pleasure to talk to you guys. I follow both of you guys. I love your perspectives. I love that you have a perspective and a point of view on everything. I love that more than anything. I love it. I love following the two of you. So maybe I'll be with you on 96% of stuff, not 98%, but I but I love a lot of what you say.
SPEAKER_03You especially love how apolitical we are, I'm sure.
SPEAKER_00You know, I I I you know, I mean, anybody that can be a fan of Lena Khan and and hate Zaran Mandani has got an interesting mix of views. And I don't know.
SPEAKER_02I'm not I'm not I'm not at all a fan of Lena Khan. Well, hold on.
SPEAKER_00Not a fan, but could see like, you know, I I could see some of the stuff, some of her perspectives may be right. I'm largely not a fan of her, but I'm certainly not a fan of Mandani.
SPEAKER_03I was steel manning. I was steel manning for no, I I cannot stand Lena Khan's uh ideology and perspective. And I think absolutely we should leave the markets alone. We should we should take out some of the subsidies that allows some of these consolidation things to happen. But I do not favor the government bullying.
SPEAKER_00The only thing I'll talk more about, I'll talk about the perversion of one thing if you give me 30 more seconds.
SPEAKER_03Yeah.
SPEAKER_00The most perverse thing is this amount of people that get upset at ideas of doing some limitations on student loans, because they don't understand that the more that the government allows somebody to take out 300,000 in student loans, it leads immediately to the healthcare education establishment or the university education establishment raising the cost of education. So that this concept that the left is so enamored with student loans, and then of course wants to then write off student loans a few years later, it is just so ass backward in terms of what actually happens in terms of our country and the actual what it what it really does is it leaves these students totally screwed. And the message is sent to them that somebody's hurting you by limiting student loans. But if we actually limit a total amount of student loans, it will actually at some point drive down the cost of education. And so it just is this concept that people are so defensive of student loans, but then don't want to drive down the cost of education is insane to me. But it is what it is.
SPEAKER_01That that's the best synopsis of Bennett's hypothesis that I've ever heard. So thank you for that, Scott. Uh for our listeners, I think you've had plenty of reasons to subscribe and read Becker's Healthcare, Becker's Hosp Hospital Review. And of course, Scott, we have to plug the book, Building Great Businesses, Create Momentum, Overcome Setbacks, and Scale with Confidence. Scott Becker, thank you so much for joining the podcast. This has been a pleasure.
SPEAKER_00Gentlemen, Dr. Coca, Dr. DiGiorgio, what a pleasure to visit with you both of you. Thank you so much. I know we planned an hour. It's now an hour and a half, so I hope I didn't. That's great. How were my welcome? Thank you folks so much.
SPEAKER_03Fantastic.
SPEAKER_00Great to visit with you.
SPEAKER_03Yep.
SPEAKER_00Take care, guys.