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Health Care Reform: Part II with Adventist Health’s Larry Mitchel

This is the second part of the Spectrum interview with Larry Mitchel, PhD, director of Government Relations for Adventist Health.

Beyond the “public option,” to what other areas of the health insurance reform debate is Adventist Health paying attention?

LM: Quality of care is a big one. When some of the third party and federal pilot programs or demonstration projects have been instituted around quality of outcomes/quality of care, Adventist Health has been one of the organizations that’s stepped up and started keeping data and transmitting data to the fed or a third parties for studies. And many of these things have turned into requirements for hospitals, so in many ways we have been on the curve or ahead of it when it comes to the discussion of quality of care.

Another issue that we think is critical is the question of the coordination of care between hospitals and physicians. The feds have been so focused on fraud and abuse, kickbacks, i.e., doctors promising hospitals admissions in exchange for concessions, that they have made it extremely difficult for doctors and their local hospitals to work in any coordinated fashion. That is something that’s going to have to change.

In the June 1 issue of the New Yorker, Atul Gawande wrote an article exploring the reasons why McAllen,Texas, is one of the most expensive health-care markets in the country. Did you read it?

LM: Yes, I read it.

It was very interesting. He raised some data-driven points about what happens in a community of doctors who own “strip malls, orange groves, apartment complexes—or imaging centers, surgery centers, or another part of the hospital they directed patients to.” He compared it to the relatively low cost and higher quality of care at the Mayo Clinic, where the physicians are on salary. Do you think the so-called Mayo model is practicable?

LM: The takeaway that I got out of it is the variation of costs to Medicare from place to place. We have known that for twenty years. You’ll see in the literature today regular references to the Dartmouth Atlas which has been around for ten to fifteen years. I think that its algorithms have been getting better and better. Its data is not perfect – it’s almost totally Medicare-based, I believe. But all of a sudden this Dartmouth Atlas has become the darling of health planning. And particularly in the Obama Administration. Also, I believe that this New Yorker piece was handed around the White House as sort of required reading by anyone working on health care reform. And I think that’s a good thing. I said to someone that I thought it was the best article on health finance, maybe ever.

One way of looking at the problem is this: if you set out a trough and pour a bunch money into it, how can you complain if people belly up to this trough and starting drinking from it? The American health industry has been constructed with incentives such so that’s not illegal for those doctors in McAllen, Texas to do exactly what that article describes.

The article was very instructive. It demonstrates one of the huge problems with American health care. It is episodic. It is piecemeal. It is uncoordinated. It is procedure-oriented rather outcome-oriented. And all of those things cry out for over use. “Doc, I have this funny thing.” “Well, lemme give you a pill for that.” “I got this pain.” “Oh well, let’s send you through the MRI or PET scanner.” I’m exaggerating, but only to make the point.

What would change Adventist Health/the health care system more? Cutting costs and dealing with these issues that Gawande raised or covering significantly more people, say under a public option?

LM: The problem in McAllen, Texas, was not price, it was utilization. I can put my hand on a tummy and say that it will go away or send you to the MRI. And if that they didn’t do it quite right and I own a piece of that MRI I might send you back. It is utilization that drove the cost in McAllen. In the Western states, and particularly in California, there has been managed care for so long that I think that a lot of the misuse of diagnostic tests and procedures has been driven out of the system. I don’t think that there is much spurious use of health care in California. I don’t know that from utilization alone, if we’re going to see a huge change. Where I think that our people are worried is right back to the payment issues. Are we going to get paid the same as we’ve been getting paid for Medicare patients when millions more Americans are given access for some Medicare for all, i.e., public plan? I think that’s the concern. And it could be very difficult because the costs are going to go up as we see more people, obviously, and have to staff up for them. If the reimbursement stays low and you don’t have other plans to shift the costs to, as we have been doing then something has to give and it will be the financial health of the provider community.

News stories about the compensation of Adventist health care top executives has grabbed the attention of many members, particularly the laity. For example, the Washington Post stories about salaries into the high hundreds of thousands and golden parachutes worth three and four million.

How concerned is Adventist Health about how that conflicts with the the Adventist message of putting mission above personal profit?

LM: I’m probably not the right person to address that question, except in the most general terms. We have a compensation committee of the board of directors that handles the compensation of top executives. The organization has what I think is a defensibly conservative policy on compensation for our executives. Of course, it always depends what the framework is. Comparing salaries between someone making hundreds of thousands to someone making $15,000 a year is different than if you are comparing those hundreds of thousands to like positions in the same industry. And I hope that this doesn’t sound defensive. I don’t feel defensive. I think that the Adventist Health salary structure is eminently defensible, if you accept the framework of like positions in the industry. In fact, our guys get paid substantively less than their colleagues working at Sutter Health, Catholic Health Care West, Kaisar and so on. It’s been a tough issue. And it is made all the more difficult because of the discrepancy between our salary structure and that of the church.

Do you think that the laity is too concerned about that?

LM: I’m not going to judge that. They see the numbers and it concerns them and they see what it is.

Does Adventist Health have a deadline for reform?

ML: I don’t think that we have a corporate sense of urgency. As I look at it personally, it seems clear to me that unless something is done relatively soon – say by the fall or the end of the year – otherwise forces in opposition to reform are going to have the time to marshal and make their case to the public and render reform more iffy.

I appreciate your time. Wrapping up here, is it fair to characterize Adventist Health as “pro health care reform?”

ML: I think so. I have not heard our people talking like reform is a horrible thing. Like people say, the devil is in the details and I have heard leadership here talk in those terms. The issue is: what will it be in the end and how will that impact us? I have heard our guys say the current system is not sustainable. It has to be reformed.


Thanks to Larry Mitchel for sharing the Adventist Health perspective. Click here to read the first part of this interview. And keep an eye out for his article coming in the next issue of Spectrum‘s journal.

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