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Harvard Business Professor and a Health Reform Expert Have Tough Talk on the Dire Need for Reform

Aired February 28, 2010 - 07:30   ET


DR. SANJAY GUPTA, HOST: Good morning, I'm Doctor Sanjay Gupta. Welcome to a special place; a place where we learn how to live longer and stronger. I'm your doctor, but I'm also your coach.

One thing that comes up over and over again when talking about health care is the cost. Just why is it so expensive? We are going to go straight into the hospital to try to answer that question.

Also, have you ever thought about this? Possibly picking your own insurance, not relying on your employer, or your company? I had a really fascinating conversation with someone about why that might be the answer to fixing some of our health care woes.

And someone is having chest pain. That pain is radiating up and down their chest. Sometimes you see them clutching their chest, but it is not a heart attack. What is it? It is a medical mystery.

Let's get started.

This week there was a historic health summit at the White House, actually at the Blair House across the street. The president sat down, the White House sat down with several Republicans to try and hammer through what health care reform might look like.

One of the issues coming up over and over again is simply cost. I can tell you as a doctor something in the system just doesn't work there, and costs are simply too high. You would be amazed if you really sat down and thought about it what is driving up your hospital bill. So I went to the operating room at the hospital, where I work, to try to and bring you a closer look.


GUPTA (on camera): One of the questions coming up all the time is what about the hospital bills? How exactly do they break down? How do you make sense of it? There is no question, it leaves a lot of people scratching their heads. I'm going to give you a little bit of an example here by taking you inside this operating room. This is the hospital where I work, where I'm a neurosurgeon. And just having an operation performed in a room like this costs $3,000 an hour. That's for starters.

Come on in. I'll give you a couple quick examples. If you look at a hospital bill, you might see an IV bag charge. It is an IV, like this, about $280 just for the IV bag. That might strike people as very high. A stapler, this is a stapler that is often used in surgery. Something like this costs about $1200.

This is a chest tube. If someone has a compression of one of their lungs, they might need a chest tube like this. That costs about $1100. You will find examples like that, really, all over a room like this.

A suture, something that is used in just about every operating room in the world. This type of suture over here costs about $200. If you look at even devices like -- this is a needle that's used for biopsies. So, if there is a concern that someone has a tumor, they would use a needle like this. And this is going to cost about $800.

It is important to keep in mind, if you ask the manufacturers of a device like this, why so much money? They will say it took years to develop something like. The research and develop costs are significant. Also, they are guaranteeing a certain level of effectiveness of this needle; that costs money as well.

But something maybe you didn't know, when you look at a hospital bill, it is not just the cost of the supplies. There's also administrative costs that are built in. There's the cost of covering people who simply don't have insurance or can't pay. That's built under these costs as well. Finally, keep in mind, that what is charged, and what is ultimately paid are two very different numbers.

RICHARD CLARK, HEALTHCARE FINANCIAL MANAGEMENT ASSN.: The typical hospital collects about 4 percent of every dollar that they -- about 4 cents of every dollar that they bill. So it is not coming out in massive profits, it is coming out as a result of underpayment from the government.

GUPTA (on camera): I'll tell you, the cost breakdown, like I just gave you on lots of these different supplies, a lot of people simply never see. What we have found is a lot of people don't care as well. If you are insured, some people may not even open the hospital bill. But there are about 50 million people uninsured out there, and they care very much about hospital bills like this. And what you can do is you can call the hospital and get a detailed breakdown. Why on the phone with the hospital, if the cost seems still too high, or just hard to understand, you might be able to negotiate some of these prices down.

And in "Ask The Doctor" this week, we are going answer this straight from this operating room and it has to do with this scan right behind me. Stay with us.


GUPTA: We are back with SGMD. In "Ask The Doctor" this week, we'll take your questions straight from the operating room. As I have always said, no insurance, no waiting. Peggy Sue from Salt Lake City asked this: "A colleague of mine died suddenly while shoveling his snow. First we thought he suffered cardiac arrest, but it turns out he had a ruptured aneurysm. He was only 45 years old. What caused an aneurism? And why do they always strike so suddenly?" First of all, Peggy, I'm sorry to hear about your friend. This is my area of expertise. As a neurosurgeon, we deal with ruptured aneurysms in the brain quite a bit. In fact, the scan you see behind me shows the type of imaging we often get if we are suspicious that someone might have an aneurism.

If my finger were a blood vessel, an aneurism is a blister on top of that blood vessel that is just weak. And when blood flows in there, sometimes too much blood gets in there, and it can actually start to bleed into the brain. That's why it occurs so suddenly. Oftentimes, people have a terrible headache, sometimes they even feel like somebody hit them with a 2 X 4 and then it is that bleeding in the brain causes all the problems.

In surgery here we often try to put a little clip across that aneurysm so we can save the patient and make sure it never happens again.

Just about five months from now I'll be in New York City competing in the New York City triathlon. As I started thinking about this, I thought to myself, you know I don't want to do this alone. So we picked six CNN viewers from around the country to train with me and be a part of all this, all this fun. So today we are going to check in on two of them, Angie Brouhard and Meredith Clark, to see how they are doing. Take a look.


GUPTA (voice over): Training for the New York City triathlon is not the biggest challenge Angie Brouhard has faced.

ANGIE BROUHARD, FIT NATION PARTICIPANT: I was diagnosed with best cancer last April. I was out of shape. And when this challenge came along, I thought, it would be the perfect thing, not only to get myself back in shape again, but to show other people that they can get in shape, too.

GUPTA (on camera): As you sort of have looked at the challenge that lies in front of you, what are you most nervous about and most excited about?

BROUHARD: Well, I'm excited because I think I'll be in really good condition. I think I'll feel really healthy. I think the swimming will be great. That is what I'm most worried about, is the swimming. I can swim, but I've never really swam.

GUPTA (voice over): But it hasn't been as big a challenge as she anticipated, either. With the help of a swimming trainer, she is getting more and more comfortable in the pool.

BROUHARD: Every time I feel stronger, I can go a little further before I rest, so it's coming.

GUPTA: Our other participant, Meredith Clark, had her own concerns.

MEREDITH CLARK, FIT NATION PARTICIPANT: There is, of course, the huge possibility of crashing and burning on TV.

GUPTA: It turns out, it's real life that presents the greatest challenges.

CLARK: Being in the office is difficult, especially in a newspaper office, because we believe in eating and eating well and eating a lot.

GUPTA: And schedules.

CLARK: The workouts themselves aren't really difficult. What I find hard is managing my time to fit the workouts in.

GUPTA: But she's fitting it all in, walking around the parking lot at work, exercising with the help of a trainer. Early morning kettle bell classes, she is even spinning on her own. For both tri- athletes the journey ahead will be long, but doable.

CLARK: There's only 150 days left, so it makes me kind of want to ramp up my efforts.

BROUHARD: I feel stronger all the time, but I feel like once I can get this done, I think I can close that chapter. I can put that best cancer behind me, and I'll feel like it is over and I've conquered it.


GUPTA: All right, guys. You are doing pretty well. Just a month into this, a lot of work to do. Also Dean, Stanley, Ricky and Linda, we are going to be looking for you soon, as well, very soon.

Coming up next on SGMD, we are talking about health care reform. Obviously, a lot of discussion about this. What exactly is happening and what is going to happen? We'll talk to a top conservative who say this is: The Democratic plans are a mess, but she does concede as well that we do need to make health care more affordable and more available. The question is how? And what does it mean for you and your wallet? We'll decipher it all in plain English. Stay with us.


GUPTA: You know, every week on this program I'm going to take you into the life of some of the most fascinating people we have ever met. People who are changing your world right know. They maybe scientists, medical innovators, even celebrities.

This week we'll cut through the noise on health care with a different perspective, something you probably have not heard. It is not politics, it is just straight talk, in plain English.

Regina Herzlinger is a business professor at Harvard. She is also author of "Who Killed Health Care?". In the past she has advised Senator John McCain during his last presidential campaign.

(BEGIN VIDEOTAPE) GUPTA: Thank you for joining us.


GRANT: May I call you Reggie?

HERZLINGER: Absolutely.

GUPTA: A lot of people call you Reggie?


GUPTA: Too many people call you Reggie.

Still in touch with Senator McCain?


GUPTA: So, you are advising him but have lost contact? Or what?

HERZLINGER: Since the campaign, yeah.

GUPTA: You are a professor at a business school, when did your interest in health care begin? How did it begin?

HERZLINGER: Well, I did my doctoral thesis in a neighborhood health center. And the thesis was about measuring the performance of physicians, and seeing if when they got the data they would change their behavior. I was interested in getting better value for the money.

GUPTA: I want to talk about some of the comparisons in a little more detail. But universal health care? This is something you believe in?

HERZLINGER: Absolutely.

GUPTA: You advised Republican candidates, so that would surprise a lot of people as a starting point.


GUPTA: What is the Republicans' obligation?

HERZLINGER: They have a plan. The plan is to create high-risk pools for sick people who otherwise couldn't afford health insurance, to give subsidies to the states that is would run the high-risk pools, meaning groups for sick people. And the plan is good news, it is cheap. It only costs about $60 billion. Bad news, it only covers 3 million people.

GUPTA: To the people who are looking to those 50 million uninsured, this doesn't sound like a very effective plan at all.

HERZLINGER: Absolutely. HERZLINGER: Do you agree with the White House plan? Or the Republicans plan?

HERZLINGER: Well, I think the White House plan is fantastic for getting closer to universal coverage. I would like universal coverage, which shows the American people that the price tag is a trillion dollars. A trillion dollars is a heck of a lot of money, especially when we are in a recession. And I think the American people don't believe that the White House plan will control costs.

GUPTA: Do you think it could?

HERZLINGER: No, I don't.

GUPTA: Well, the public option, which was a big discussion point over the last year now, more than that. It doesn't seem to be on the table anymore. And the idea was that this would provide an honest broker, if you will, against all the private insurance companies. Why is that a bad idea?

HERZLINGER: Well, the private insurance companies are no saints. They deserve some real competition. But the problem with the public option is if you look at a public plan like Medicare, all the seniors love Medicare. And the reason they love Medicare is they are not paying for much of it. Medicare has an unfunded liability of $38 trillion. In plain English, Medicare is sticking our children, our grandchildren, our great grandchildren with the tab for providing Medicare.

If we had a public plan, would the U.S. Congress would they suddenly develop more backbone and not under price the public plan, pandering to current generations of voters and thinking, well, future generations, they are not going to vote for me. That's the scary thing about it.


GUPTA: So what can we all agree on? Well, I asked Reggie what she thought was the common ground. Her answer surprised me. Stay with us.


GUPTA: Regina Herzlinger is the author of "Who Killed Health Care?" It was a best seller. She is also a professor at Harvard Business School. In the past she advised many Republican candidates, including most recently, Senator John McCain.

We started off by talking about the moral imperative, as an argument for universal health care. And then you said more recently that the private insurance companies are no saints in all of this.


GUPTA: If private insurance policy could fix this problem.


GUPTA: And address some of the concerns you are raising, why haven't they done it?

HERZLINGER: Yeah. Well, the private insurance right now is not selling to consumers. They are selling to businesses, or they are selling to governments. Businesses and governments don't have the same kinds of issues that consumers had. If they had to sell to a consumer and they screwed that consumer in the delivery of health insurance, specifically, when that person got sick they said, no, you are going to have to go through hell in order to get health care, there would be tremendous uproar about that in a consumer-driven market.

GUPTA: But what you're describing happens, though.

HERZLINGER: Absolutely.

GUPTA: We have people being denied.

HERZLINGER: Absolutely.

GUPTA: You have people going through lots of red tape.

HERZLINGER: Absolutely. So, these things happen right now. My point is in a consumer-driven market they would happen much less. And the reason I say that is Switzerland have a consumer-driven market. They have universal coverage, all the Swiss are insured, but they buy their own health insurance. The Swiss have the highest rate of satisfaction with their health insurance in the world. Their administrative costs are a third of what they are in the United States. The Swiss have 84 insurance companies. The country is the size of the state of Massachusetts in population, and we have 15.

GUPTA: What is the disadvantage? Do they ration care over there?

HERZLINGER: They don't do that in Switzerland. The Swiss have more utilization. They see doctors more often. They have more hospital beds, they have more physicians, they have more MRIs. They also have some really cool insurance policies. Suppose you don't smoke? Suppose you start exercising three times a week? Suppose you change the things that are abusive in your life? You could buy a five-year health insurance policy in Switzerland, which if you stay healthy it gives you 40 percent of your money back.

In Massachusetts, that means if I stay healthy, I would get back $40,000 the end of five years. Would that motivate me to get healthy? You bet. You can't do that in the employer-based market. Because the employer doesn't think the employees is going to be around for five years.

GUPTA: The premise is, and for the purpose of this conversation, insurance companies are greedy. They are not going to want to cover people who are sick. They are going to want to make money instead. That means covering healthy people and denying claims. All sorts of things, all the things that we hear about.


GUPTA: Why won't that still happen under --?

HERZLINGER: Well, we need insurance reform. We need the government to say, look, here are the rules. You want to be in this business, fine, here are the rules. If you see a sick person, you have got to cover them and you cannot charge them an exorbitant kind of price.

GUPTA: If this current version, of the White House plan, the Senate plan, essentially, merged with some elements of the House plan, does not pass, and the last time this was tried was 15, 16 years ago. Are we going to wait a long again?

HERZLINGER: We can't afford to let it slide. Health care is destroying the economy of the United States. And we have 50 million uninsured and the Indians spend $49 per person, per year, on health care. How can we survive as an economy unless we solve this problem?

GUPTA: I know you feel strongly about it. Will it happen?

HERZLINGER: We have to solve this problem.

GUPTA: And that's why you are the godmother of consumer-driven health care. Howard Schultz, incidentally, said he spends more money on health care than he does on coffee beans. He is the CEO of Starbucks.

Thanks again. Enjoyed it.

HERZLINGER: Thank you.


GUPTA: We have some new evidence out there showing taxing high fat and sugary foods may just make a difference in the obesity epidemic. Stay with me here.

Researchers asked mothers to shop in a mock supermarket. And tried to see which made a bigger difference. Making fattening foods more expensive, or making healthy foods less expensive. Now, it turns out what they found is making the junk food price here ended up cutting calories of the purchase. It is interesting. When you cut the cost of the healthier foods, the moms just used the extra money to buy more junk.

Let me add something here. There are probably a lot of reason not to tax any kind of food. Food is not the same thing as tobacco, after all. And if you make healthy food and junk food closer to the same price, it's probably going to take some time for habits to change.

And you know something else? Millions go to the emergency room every year with chest pains. Something we talk about quite a bit. If it's not a heart attack, what could it be? Our medical mystery. We'll solve it after the break.


GUPTA: We are back with SGMD.

You know, I've had a really hard time forgetting Haiti. I had been down there for almost a month as many of you may know. And I've been following along this brave 12-year-old girl. She survived the earthquake in Haiti. And her name is Kimberly.

She suffered this massive brain injury and I ended up operating on her on the USS Karl Vincent. It was remarkable. The military called because they couldn't find a neurosurgeon. I operated on her and had no idea how she did.

A few weeks later I met up with her again when she had recovered and was ready to return to Port-au-Prince. We were able to reunite her, as well, with her father. It was a remarkable thing. She did not even know much about the earthquake, because she had been taken to the hospital. And as we were driving along she saw all of this and finally had that tearful reunion with her father.

She learned she lost her mother, her sister, and her home. I can tell you that a lot of people obviously touched by the story of Kimberly. I could not stop thinking about her, after I left. It was so hard to relieve her trying to recover from this operation out there in that situation, without a home.

Now we have a bit of good news to share with you. What happened was there was this organization called Can-Do. They watched CNN coverage and they eventually came to us and said they wanted to help. They started taking lots of supplies to this particular area. The neighborhood where Kimberly was, was just 10 minutes away from a tent city, but because they had no communication they simply had not gotten any supplies for a month.

The reason you see that smile on her face, is because this organization, Can-Do, started helping her and many others get into homes. I can tell you, you know, there are lots of people who still remain in Kimberly's situation, thousands, 10s of thousands, probably 100s of thousands, and they still need help. But at least for Kimberly, it's great to see that smile again. A bit of good news.

We are now onto this week's medical ministry. What mimics the symptoms of a heart attack. A really important question, and really there are multiple answers here. A gal bladder attack can do this, spasm of you esophagus, even a panic attack. All of those things can be mistaken for symptoms of a heart attack.

Probably the most common one that we hear about though is acid reflux or heartburn. That is because it can give you the sharp burning sensation in your chest, just below your breastbone.

Take a look at this. When you eat, this area over here is called the lower esophageal sphincter. You see it open to allow food to come in. And then that sphincter closes, which is very important, so that acid that you see gurgling around in your stomach, including hydrochloric acid, doesn't reflux up. But when that sphincter opens there, that acid starts to go up. That is reflux, that is that burning that you feel. That is what causes those symptoms that can sometimes be confused with a heart attack.

Take a look at this image over here. This is what it looks like when sometimes that esophagus has a lot of acid on it. It gets really corroded like that. It can cause problems. It can even cause little holes in your esophagus, which again, can be very, very problematic.

Now keep in mind, if you do have chest pains always take them seriously, especially if that pain radiates beyond the chest to your neck, your arms, your shoulders. All of that should be an important warning sign for men and women alike.

Now if you missed any part of today's show, be sure to check out my podcast on

And you know, I want to do something we hardly ever do here. But give a quick happy birthday to Doctor W. G. Watson. Doctor Watson is an obstetrician and gynecologist. He turned 100 this week and he is still seeing patients. This is somebody who actually delivered a lot of the people who are now partners in his own practice. Check out his amazing story at

As always, remember this is the place for answers to all of your medical questions. Thanks for watching. I am Doctor Sanjay Gupta. More news on CNN starts right now.