Skip to content
Who's in the Video
David Cutler served at Harvard University as an Assistant Professor of Economics from 1991 to 1995, was named John L. Loeb Associate Professor of Social Sciences in 1995, and received[…]

David Cutler describes the need for new medical technologies and pinpoints the sectors are poised to deliver these changes.

Question: What role will innovation play in solving our healthcare problems?

David Cutler: I think innovation is going to be key to healthcare and if you say to me, ‘What’s going to solve the healthcare problem?’ It’s going to be innovation.  There are different kinds of innovation.  There innovations in medical devices and drugs and so on. Many of them add to expense but they may improve health by quite a lot.  But there’s another kind of innovation that doesn’t get touched on as much, which I think it worth highlighting: which is innovation in the way we go about providing medical care. 

There’s an old TV show Marcus Welby that probably the older listeners will have seen and the younger viewer will not.  Marcus Welby practiced medicine I think, it was the Nineteen-Fifties or so.  There is nothing that is done in the medical system today that Marcus Welby would recognize.  No procedure, no pills, nothing.  But he would completely recognize how medical care is delivered. It’s a doctor, in an office, with a patient, and that’s what happens. So, almost nothing is the same in the world today, as it was in the nineteen-fifties, except the fact that we go about providing medical care in the same way.

Let me just take one example of why that is so harmful. If you look at patients with chronic disease, diabetes, or hypertension, or high cholesterol, many of them do not take the medications that the doctor recommends because they don’t know what they’re supposed to do, or they have side effects and they don’t know how to deal with them. It’s very easy to help them, nurse practitioners can help them, physician’s assistants—it does not have to be a doctor. We do not pay for that, we do not recognize that, we do not allow that in most circumstances and the result is that those people are not treated well. They wind up with complications with very severe effects afterwards, and the whole system just functions poorly. We need a healthcare system that’s focused around helping the patient, and if that means that there’s a nurse practitioner who’s there to help you out, hey great! If that means that there’s a physician’s assistant, or a group visit with lots of other people who’ve figured out how to do that, then that’s what we have to enable.

So far, we almost prohibit it. We don’t help it, we’re not even neutral, we basically say we’re not going to allow that; which is just a huge, huge mistake, and it’s something that’s going to have to be very different or else we’re never going to make a lot of progress. 

Question: What areas in healthcare are generating the most promising innovation?

David Cutler: A lot of the innovation in health care recently have come from a couple of places. One is the kind of analyst community, where there’s been a wholesale change in thinking since the past reform effort sixteen years ago, where we have much more attention to information technology and how you’d eliminate waste, and so on—none of which you saw.

And then, what’s very interesting is the provider community has a number—and insurance company for that matter—has a number of very progressive elements.  Groups that are out there saying “You know what, we’re not just going to tolerate patients getting sub standard care, care that’s not good as it should be.  And so you have the Mayo Clinics and the Cleveland Clinics and the Kaisers and the Group Health Cooperatives and the HealthPartners and the Geisinger Healthcares and the Intermountain Healthcares and Virginia Mason.

All of those examples, those are companies that said—and you know, they’re insurance companies, there are provider groups, there are doctor groups—they said that, “You know, we’re just not going to take it anymore.”  And many of them put themselves at financial risk by doing better.  They got in situations where they were preventing readmissions to the hospitals, enough so that they nearly went under.  And some of them have to go begging and pleading to Medicare saying “Can’t we work out some arrangement where when we improve quality and lower cost, we don’t suffer so much?”  And that’s actually provided a lot of the example that we have, so when we talk to people now about health care reform, it’s not hypothetical, it’s real—it’s this works, and we see it work, and you can have it too.

And I think between the kind of analyst thinking and what’s going on at the most progressive places, you will really have this model out there, and this framework for what to do, and it’s very, very helpful.  

5c Card: How to balance innovation and full coverage

David Cutler: Two parts have to go together, the covering people and the modernizing the health care system—you cannot do one without the other.  In Massachusetts, we covered people without doing anything about the cost. We decided we wanted to cover people first, and we would deal with the cause later.  Now we’re stuck dealing with the cost, the system costs more than we know how to finance, just because all the medical care costs more than we know how to finance. So we have got to come back and we’re now trying to deal with the cost. 

In the national level, people talk about saving money first and then covering people, but nobody wants to see the implications of a healthcare system that tries to save money when there are fifty million people without coverage, and another fifty million people who are in and out of coverage during a year, it would just be an epic disaster.  So they have to go together. The key to it has got to be innovation.

 Recorded on: July 06, 2009