Health Economics in the 21st Century: A Conversation with Dr. A. Bapu Jena

Interview by Hugh Hankenson

HUHPR Associated Editor Hugh Hankenson interviewed Dr. A. Bapu Jena, MD, PhD. Dr. Jena is the Joseph P. Newhouse Professor of Health Care Policy at Harvard Medical School and a physician in the Department of Medicine at Massachusetts General Hospital. Dr. Jena earned his BA and BS degrees from the Massachusetts Institute of Technology before receiving his MD and PhD in economics from the University of Chicago, later completing an internal medicine residency at Massachusetts General Hospital. Beyond his research, which includes the economics of physician behavior and the economics of medical innovation, Dr. Jena is a faculty research fellow at the National Bureau of Economic Research and host of the Freakonomics, MD podcast.

Hugh Hankenson (HH): Thank you very much for taking the time to speak with me today. I am going to begin by asking you a little bit about yourself and your career so that any readers unfamiliar with your work have a perspective on your background. What motivated you to become both a physician and an economist, and how does your practice of each affect your perspective on the other and your work as a whole?

Bapu Jena (BJ): It was a little bit by chance. I knew I always wanted to be a doctor, and I also suspected that I wanted to do research in addition to being a doctor. I studied biology and economics in college and worked in a basic science lab. When I was interviewing for MD-PhD programs, I was planning to do a PhD in biology. However, when I went to the University of Chicago to do an interview for their program, the program director at the time said, “Oh, I noticed you’ve studied economics. Would you want to do your PhD in economics instead?” And I said, “Yeah, that's interesting. I've never thought about that, but I'll give it a shot.” And so it was random; I knew I had a backstop if the economics PhD didn’t work, as I would have gone back to do my PhD in Biology in conjunction with my MD. With this path, I would have been a clinician-scientist working in the basic sciences. So it was really just luck, in a lot of respects. Someone offered me the opportunity, I had a background in economics, and I thought it would be interesting to try something different than biology.

In terms of how these two relate: in most respects, they're not related at all. Medicine and economics are fundamentally different. There's a lot more overlap between medicine and cell biology or genetics or immunology, than there is with economics, obviously. But for the types of economic questions that I answer and look at, which are mostly based on large data and using the tools of economics and natural experiments as a methodology to understand the cause-and-effect relationships between variables, medicine is really good because it gives me a lot of ideas. For example, a lot of the stuff that I study is stuff that I've seen in the hospital or heard from other doctors, or that just come to me because I have that sort of clinical lens in my mind at all times. On the reverse side of whether being a practicing economist helps me become a better doctor, I’d say probably not. This difference primarily originates from the sense that if you spend time doing economics, and you don't spend time doctoring; thus, there's a trade-off, because the more you do something, the better you get it. However, I think that the way that economists think through problems very quantitatively, with a logical approach that uses data and probabilities, is helpful in medicine. This is especially true because a lot of medicine is very much just pattern recognition and knowing facts, so if you have a framework for thinking about problems (which economics is quite good for), that can be helpful, even in a clinical context.

HH: Thank you very much for that answer. The interplay you describe between medicine and economics makes sense — how they, if not directly impacting each other in practice, allow you to approach your work with two distinct perspectives. I want to move into Freakonomics, MD, which I understand is a relatively new venture. Could you describe your experience hosting Freakonomics, MD, what your intention was in creating the podcast, and how it has influenced your other academic and clinical work, if at all?

BJ: Absolutely. I started doing the podcast almost a year ago, last August actually. I had been on the Freakonomics podcast before because a lot of the work that I do describes the economics of medicine, and you could probably consider it as a sort of “Freakonomics of medicine”. The Freakonomics team and I had a good relationship and they had been thinking about broadening their franchise into different types of shows; that's how the show came about. I think there is a recognition that people are very interested in issues around healthcare and medicine. I, in particular, was doing a lot of work that was very Freakonomics-like in medicine, so it was a natural fit.

Additionally, I was looking for the opportunity to do something a little different anyway. I do a lot of research; it's fun to do research and to ask these “somewhat quirky” questions. However, what I like about the show is that it just allows me to talk to and reach a very different audience than the readers of the New England Journal of Medicine. It also allows me to be able to work on lots of different types of questions and topics since we have probably 40 or 45 episodes a year. Therefore, there are a lot of different topics that we can touch on; it would be impossible to do research in all those areas. Those are a couple of reasons why I think I was interested in doing the podcast.

HH: I want to pivot a little bit now. A portion of your work regards physician behavior and the influences on this behavior, economic and otherwise, at play. From your experience, what are the pressures that healthcare professionals face, from the patients under their care, their superiors, and the organizations in which they practice?

BJ: There are a lot of different pressures. The largest pressure, I think, is the pressure to help patients get the right answer, to get the right treatment. I think that that's 80-90% of medicine. I think that it is important to state this because when reading health policy news, you often see stories that say, “doctors are getting paid a certain way and that's leading them to choose certain types of care”, or “hospitals are getting paid a certain way, and those hospital incentives are being passed on to the doctors and changing the way they practice care”, or “doctors are influenced by X, Y, and Z”. All of that might be true, but are we missing the forest for the trees? I think when you go see a doctor, by and large, you can expect that what they offer you as a treatment and the quality of the care that they provide to you is basically determined by their quality as a doctor and their desire to help you get better. That's like 90% of it, probably. I've tried to argue that if you're trying to understand how to improve healthcare, start with that 90%, not with the other 10%, which includes factors beyond a doctor’s ability and desire to provide care. Maybe we focus on the 10% because it's easier to execute and investigate, such as saying, “let's change the financial incentives for doctors”. In all the papers that look at that question, some effects are identified, but they're usually pretty small. In other words, the amount of variation that you observe in the way doctors practice, and their outcomes, very little of it is explained by the financial incentives that they face.

HH: That makes a lot of sense. So given that perspective, how do we affect that 90%? Moreover, what would affecting that 90% mean? Is it an effort to increase caregiving tendencies, which you describe as already being the most significant determinant of outcomes?

BJ: I think so. So I think (and now we're speaking about the decisions that are under the domain of the doctor) when you say improve health, there are a lot of considerations. First, you have to improve access to health care. Secondly, you have to improve care itself. To me, this means ensuring that treatments are available for diseases for which there have not been treatments in the past. We also need to define the specific objectives of physicians, which I believe include, getting the right diagnosis, putting patients on the right treatment, and doing so in a way that's timely, that’s patient-centered (where the patient feels like they have a good experience with the doctor) in a way that is efficient, (if it takes you six weeks to make a diagnosis and treatment plan that you could have made in six hours, then that's a problem), in a way that is equitable (in the sense that we would have made sure that all groups have access to similar types of care and good outcomes). Those are the efforts that I'm thinking about in terms of high-quality care.

Now, what does it take to get there? I think part of it is about training doctors better and changing the focus of medical education. We teach a lot of things in medical school, some of which are probably not that relevant for clinical practice. In conjunction with teaching doctors more about diagnostic reasoning skills, we need to make sure that time is not a major constraint on doctors. Doctors are pretty busy, and as a result of being busy and seeing numerous patients, it's not hard to imagine that they might make mistakes. Part of the resolution to this issue is understanding who are those patients who need more time to get to a diagnosis and making sure doctors have that time to diagnose and care for these patients. We could even involve technology in meeting this objective since technology can be used to predict who the patients are for whom that diagnosis is gonna be more complex and when they're gonna have many ongoing medical issues. Further, we could set up smart schedules where doctors can then spend more time with those patients. I think those are probably the two things that affect the 90%: medical education, diagnostic reasoning, understanding of available treatments (that’s education also), and then also time. I think both of these foci are probably underappreciated.

HH: I want to dig into the time question further. How do expectations of physician productivity, such as the generation of relative value units (RVUs) and needing to get through rounds, affect patients, their outcomes, and their physicians?

BJ: I think that the financial incentives matter, but they may not matter in ways that are obvious to us. I’d like to emphasize again that I think that the financial incentives are still way less important than the 80-90% percent of what drives medical care and outcomes. Let me just speak on those issues around the incentives, such as compensation by RVU generation. In considering the extent that the financial incentives a doctor faces influence their care, the key question is, do they do so in a way that is helpful or harmful to patients? On one hand, if you pay doctors for every service that they provide, their inclination would be to provide more services: that's what they’re incentivized to do. Is it a good thing or is it a bad thing? If doctors are paid more to perform colonoscopies and now we see more age-appropriate colon cancer screening, that's not a bad thing, that’s a good thing. However, if you see inappropriate colon cancer screening (screening people who are not eligible or who have very low risk) then maybe that's a bad thing. I think it becomes a case-by-case inquiry to understand when incentives are causing problems. To summarize, I don't think one should automatically assume that more care is better, nor should they automatically assume that more care is worse, as some people are sometimes inclined to do. I think you have to look each time.

HH: So it requires a nuance of perspective and deep consideration of the techniques the doctors are using, the impact that has on an individual's health, the incidence of the illness, the risks? Evaluation of incentives is more complex than a simple “good” or “bad” label”?

BJ: Yeah, that's right.

HH: Great, thank you. So on the other side of the time question, regarding patient perspectives, my understanding is that at times patients feel that their care, such as when they are left waiting alone for a long time. If patients aren't feeling like they're getting enough time with a physician or aren't getting enough time for care, what can and should be done? What do you make of this issue, and what do you think should be done about it?

BJ: That's a great point. This question refers to the issue of timeliness of care, which is important for two reasons. The first is for medical reasons, which is that some medical conditions are very time sensitive, and you need to act quickly to get the best outcome. However, I view the other reason as being just as important; when you have a medical problem, it takes a huge psychological toll to not have that problem be solved, to still have uncertainty as to what's going on, to what's causing you to feel that way. I think that timely care is of critical importance and that we don't appreciate it enough. Medicine is one of those fields or industries where if you have a problem on a weekend, you want to be able to call your doctor and be able to get a sense right then what's going on. Do you have to go to the hospital? Is it okay to wait? Sometimes it is possible to get an answer, but oftentimes it's very difficult to do so. It's not uncommon for primary care type appointments and certain specialist appointments to require a wait of a month, two months, or three months to see a doctor. I personally think this timescale is unacceptable. This wait would not be the case in any other industry that would be considered “well-functioning”.

HH: Adjunct to the issue of timeliness, I think patients do probably correlate the amount of time they're interacting with healthcare staff with the care they're receiving. This is perhaps an unfair assumption on the patient’s part, but what can be done to minimize the number of patients who don't feel they get enough facetime with physicians?

BJ: That's also a problem, and it again relates to time and making sure that adequate time is built in for doctors and patients. The relevance of this issue matters based on the patient's preferences for care and the issue that has motivated them to seek care. For example, if a patient reports to a hospital or primary care center with a really quick medical problem, they likely need less time in front of the doctor. However, if the issue is highly substantive, and there are numerous treatment options to be discussed, a patient would never want to feel like they’re rushed in that encounter. Right now, doctors' schedules are built in such a way that focuses on the efficiency of the doctor and the healthcare team as a whole. As an effect, patients typically have to wait. Instead, we could say, “Alright, let's just build in some capacity to be able to have longer conversations if we need them”. This expansion of capacity is being done more in the field of concierge medicine, where doctors are taking on fewer numbers of patients. However, these patients are typically paying the doctor quite a bit of money, and not everybody can incur these costs, nor is it necessarily the type of medical system that we can expect for everybody. However, for people who are more medically complex and require significant time with their physicians, I think that makes a lot of sense and should be developed further.

HH: Thank you for your perspective on this critical issue. On a larger scale, to you, what are the greatest issues affecting the American healthcare system at this time, and then what does your ideal future of American healthcare look like, particularly as it relates to patient access to care, costs of care, and the practice of care? How can we move towards that future?

BJ: Generally, health policy people think of the core issues around costs of care, quality of care, and access to care. Questions regarding access to care include whether or not people have insurance and whether or not they can see a doctor. I think there are explicit ways we can improve these issues. Cost of care is also important; we spend more on health care than other industrialized nations and there's a lot of interest, rightly so, in trying to lower the cost of care. Part of that, I think, relates to the price of care here. The price of all medical care is higher; we focus a lot on drugs, but the price of doctors and the price of hospitals, the price of everything is higher here than in other countries. Thus, most of the inter-country differences in healthcare expenditures are driven by price differences, but not by utilization or quantity differences. I think there are probably ways to think about pricing. Furthermore, there are ways to think about unnecessary care, wasteful care, that we provide to patients that we don't need to provide. Finally, quality, which means if you go to the doctor, you want to make sure that you get the right diagnosis, and then make sure you get the right treatment. We know we have quality problems, but that's an active area of interest.

I will say the following, I do think that all of these issues are important. However, I think the foremost problem in health care that we need to solve (and this may be contradicted by what other people would say or other people may disagree with this perspective) is how to better treat and cure disease, and to me, this is simply a function of innovation. I want to live in a world where we have treatments for sickle cell, or we have cures for cystic fibrosis; where we have cures for breast cancer, colon cancer, and lung cancer; where we have cures for Alzheimer's disease. Most people in health policy, 99% of people in health policy, focus on those first three issues I talked about: costs, access, and quality of care. Very few people are thinking about the innovation side of these issues or consider questions such as “what does it take in terms of the innovation ecosystem to be able to generate better treatments and cures for those diseases for which we don't have good treatments or cures?” This issue of innovation, I think, is where the future is really because we know what's going to separate us 50 years from now from today. It's going to be medical technology. That's going to be the key difference.

HH: How do you think we can move in that direction? Is it fostered by increased federal funding for the basic sciences, by a nationwide focus on technology development, and/or by big hospitals and health systems? Where do these come from, innovation and the innovation ecosystem, as you term it?

BJ: I think it's both actually. I think it's increasing federal funding for research and being smarter about how that funding is targeted. Additionally, it is making sure that companies have the incentives to develop new medical technologies and are rewarded when they're able to do so well. I think those are the two big things to foster innovation: making sure that the incentives are there for industry and that the funding is there to do the research.

HH: Thank you for that and all your insights, Dr. Jena. I trust our readers will benefit from hearing your perspective.