Kate Goodrich: A Better Model for Care
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Howie and Harlan are joined by Kate Goodrich, chief medical officer for Humana and a former Medicare staffer, to discuss the improvements in care and outcomes that result when providers are paid for each patient, not each service. Harlan looks at the challenge of payment for AI-based diagnostic tools; Howie asks if free tuition at Johns Hopkins medical school will address the real problems in medical education.
Links:
AI Diagnostic Tools
The Cardiovascular Workforce Crisis: Navigating the Present, Planning for the Future
“American Medical Association Grants PLA Code to Tempus Algorithmic Test, PurISTSM”
Kate Goodrich
Humana: Value Based Care Report
Centers for Medicare & Medicaid Services: Value Based Care
“Medicare Spending on Ozempic and Other GLP-1s Is Skyrocketing”
Free Tuition at Johns Hopkins
“Bloomberg gives $1 billion to Hopkins to make tuition free for most medical students”
Johns Hopkins School Of Medicine: Tuition And Financial Aid
“Free med school tuition won’t solve the shortage of primary care physicians”
Learn more about the MBA for Executives program at Yale SOM.
Transcript
Harlan Krumholz: Welcome to Health & Veritas. I’m Harlan Krumholz.
Howard Forman: And I’m Howie Forman. We’re physicians and professors at Yale University. We’re trying to get closer to the truth about health and healthcare. Our guest today is Dr. Kate Goodrich of Humana. But first we always like to check in on what the hot topics in health and healthcare are. And so what are you thinking today, Harlan?
Harlan Krumholz: Well, this week I’m thinking a lot about payment for AI. I’ll tell you why, and I’ll harken back to a piece that I wrote with a couple colleagues, Richard Frank and Robert Jarrin, in Health Affairs last September on the challenge of federal coverage and payment for AI innovation in healthcare. And this week I saw a press release from Tempus that just got me thinking again about how we’re going to manage this new era. So just for a little background, Tempus AI is this healthcare technology company and was founded by the guy who was the founder of Groupon, Eric Lefkofsky.
Howard Forman: Oh yeah.
Harlan Krumholz: So you may have seen that Tempus just went public about four weeks ago, and it was under the ticker TEM. And I don’t know how they got, that was still available, but it was. And the IPO price was $37 per share, and they’ve actually been able to hold it pretty well. As of today, I know it’s around $34, $35, just slightly down from the initial price. And what they do is, they’re using largely AI to analyze medical data. Most of their revenue, by the way, was as a lab testing company. They were running the omics for a lot of cancers over time.
But their intent, purpose from the very beginning was really to be an AI company and to help doctors personalize medical care. And this focus on cancer is kind of expanding. For example, on—just last week, they got FDA clearance on an AI algorithm to identify people from an electrocardiogram, people who are not in atrial fibrillation, who have an increased risk of developing atrial fibrillation in the future. And this is just kind of interesting because it’s not actually diagnosing a condition, it’s diagnosing the potential increased risk for some condition in the future. We’ve done this for cardiovascular risk, but now basically taking an ECG.
Howard Forman: You brought this up two years ago. I didn’t know anything about this. You brought this up when we had Rohan Khera on the podcast. Can you just explain a little bit about how that can do that? That seems just so miraculous.
Harlan Krumholz: Well, and as a disclosure, I’m a co-founder with Rohan. Rohan’s really the leader of this thing with a Yale undergraduate who’s now a Rhodes Scholar, Veer Sangha of Ensight-AI, where what we’re doing is using computer vision to basically take the image of an electrocardiogram and we can make inferences about diagnoses that no cardiologist, the best cardiologist in the world, can’t make. Because it’s not just built on the rules that we learned about what represents certain structural abnormalities in the heart, for example, or history of myocardial infarction or heart attacks and things like that.
But we’re able to take the entire information from the electrocardiogram and train it by looking at, for example, echocardiograms or advanced imaging technology. And then being able to use that training to be able to now just take the electrocardiogram and diagnose something like hypertrophic cardiomyopathy, which is thickening of the heart, or amyloid heart disease. Both of these have effective treatments now, especially if you’re treating early, it’s good; many people undiagnosed. Now, these things are able to make inferences that you couldn’t make before. If the heart’s not squeezing normally, for pennies a day, you can treat people to avoid developing heart failure in the future. But most of these people don’t even know they have it.
If you’ve had an electrocardiogram now, these kind of tests are doing, we’re doing it. Some other people are doing it. What’s distinct about what we’re doing is we’re just taking images. So no data integrations are necessary. But Howie, you’re going to see this throughout medicine, radiology. You’re seeing this all the time where it’s not just what the radiologist can see, but it’s much more being able to take advantage of all the data that’s generated.
Howard Forman: Opportunistic. Yeah, it’s opportunistic diagnoses.
Harlan Krumholz: So this is going to spawn just a revolution in what we’re capable of doing, and it’s going to move away. I don’t think in five years, a cardiologist is going to be reading electrocardiograms. We’re going to be using these programs because it’s going to be more highly efficient. It’s going to be more accurate and reliable. And we’re going to be able to diagnose a much broader breadth of conditions out of the simple electrocardiogram than we ever were before. The power of it is, there was an article that came out this week in Journal of American College of Cardiology, where I’m an editor, that was talking about the shortage of cardiologists throughout the country.
I think AI is going to help bridge this gap. There are many counties in the country that don’t have a cardiologist. You don’t have access to cardiologist even within a certain distance. But these things mean that it’s like having an expert cardiologist on your shoulder—actually better than a cardiologist.
But let me just get back. I know we only have a short time. So the thing was, the major thing was that the AMA puts out these codes, these CPT codes that people use for billing. And if you’ve got some new test, you really need a code to be able to link to it so that someone can assign a payment to it. Believe it or not, that’s how our system works. And the AMA is in charge of this system. So that’s why when we say the AMA does it. And Tempus received a billing code from the AMA for an algorithmic test called Purist, that is really, it sounds kind of dry, but it’s a big deal because it analyzes RNA data to classify pancreatic cancer into subtypes, which helps guide treatment decisions.
But the key thing about it is that it is just improving our ability to leverage existing data, and now they’re being able to be paid for it. And I didn’t want to make this all about Tempus except to say we’re going to be in a world where we’re going to start struggling with now: What do we pay for? What’s providing value? Because they’re going to be potentially thousands of these kinds of tests. How do we compare them head to head? Which one should we trust? Which one should we be using? How are these business models going to work, exactly? And what’s it going to do for the underlying budget of healthcare when AI comes in and we start paying piecemeal for these things as opposed to being in a value-based environment where you get one payment and then use whatever you want.
So anyway, Howie, I don’t know what you’re thinking about this, but I was interested that they granted this to Tempus, and I think it’s part of this big trend of creating these algorithms, which are going to find their way into healthcare. It may start being paid for, just like other tests.
Howard Forman: Certainly one of the additional things about a CPT code is not just being paid for, because sometimes they won’t pay for it even if you have a code, but it does allow you to collect more data about who’s using things. So I think that’s also a useful thing.
Harlan Krumholz: That’s right. So let’s ask Kate about this when she comes on. I’m curious what she thinks from the Humana perspective. All right, well let’s get to our interview.
Howard Forman: Dr. Kate Goodrich is Humana’s Chief Medical Officer. In this role, she provides executive clinical leadership for the insurance and CenterWell businesses in addition to holding accountability for Humana’s physician engagement, healthcare research, and health equity and bold goal initiatives.
Before Humana, Dr. Goodrich worked at the Center for Medicare and Medicaid Services, or CMS, serving as the director of the Center for Clinical Standards and Quality, as well as the Chief Medical Officer. Dr. Goodrich is also on the faculty at George Washington University Medical Center, where she continues to practice clinical medicine as a hospitalist and holds the title of Professor of Medicine.
Dr. Goodrich holds a bachelor’s degree in molecular biology from Rhodes College, an MD from Louisiana State University School of Medicine, and has a master in health sciences research from Yale University, where she also completed the Robert Wood Johnson Clinical Scholars Program and where we first met her. She also completed her residency at GW in internal medicine.
So first of all, I want to welcome you to the podcast. It’s always a delight to see you and to have you. You’re a great contributor to Yale and coming back to campus. And so we’re happy to have you on the podcast. And I want to start off with probably the question that I think a lot of people would have. You are a dedicated clinician, you’re a scientist, you’re a scholar, a public servant, you worked in government for many years, really tirelessly in some of the hardest jobs, and yet you’ve transitioned over to a private health plan, Humana, which is a large health insurer and also a big player in the Medicare Advantage space. And I’m curious to know what motivated you to do that and where you see your role right now.
Kate Goodrich: Well, first, thanks for having me. It was so wonderful to see the two of you and be here. I’m just really grateful you asking me to be on the podcast. I think the through line for my career has been around really focusing on improving the experience and ultimately the health outcomes within our healthcare system for seniors. That started during my time practicing medicine full-time at GW as a hospitalist. So taking care of patients who were in-patients in the hospital, most of whom have public insurance, particularly Medicare or Medicare and Medicaid. And then being a caregiver from my mom, who is 86, and my stepmom, who is 84, and then coming to CMS, where I really focused on the Medicare program and all of the programs within to improve quality of care for seniors.
And so when I realized I was ready to move on to the next thing, I really thought about what part of the healthcare ecosystem have I not had exposure to where I could continue to learn more but also continue to contribute with that through line of better care for seniors. And that really brought me to Medicare Advantage in general and insurance companies in general. I had learned when I was at CMS collaborating with health plans that they weren’t all bad people. They actually did some really good things.
And so Humana came my way through a connection that I had. And I actually came to Humana not as CMO. I came to stand up an entirely new clinical analytics function with the goal of identifying ways to reduce costs through quality improvement and better health outcomes, which was a whole new function in the organization. And it told me something that Humana wanted that function in the first place. That they weren’t just focused on the financial levers for reducing costs.
And so when I became CMO, I’ve continued to be involved in some of that work, but my focus really is on how do we have the right set of clinical policies and clinical strategy that really advances that cause. So a lot of my work is around really advancing our strategy around value-based care, which actually there’s a body of literature that is emerging that shows that outcomes for seniors are better in especially full-risk value-based care arrangements. How do we have the right kinds of interactions with the physicians we contract with to really focus on improving outcomes for seniors in those ways and a variety of other levers. But Humana was kind of a natural next step that sort of satisfied my need for more learning while also still focusing on improving outcomes for seniors.
Harlan Krumholz: Howie, I don’t know if you know that Kate’s one of my favorite people in the world. She is extraordinary. And you know why? It’s because of the way she exemplifies the kind of leader who inspires people around her, makes people around her do better, is non-polarizing but actually uniting. And she does so in a way that is just grounded in a deep knowledge of what it’s like to take care of patients. A knowledge when she was here with RBJ gaining in stats and EPIs, so she knows the science. But being able to navigate complex organizations.
I had a lot of things I want to talk to you about, Kate, but let’s just start here. What lessons do you have for us about navigating these complex organizations? I mean both in government and Humana. I mean they are huge ships, even turning them a couple degrees takes a lot. They’ve got lots of constituencies. The government, that’s one issue. For you, it’s both your customers, people who are signing up for you. You’ve got the docs and the L systems, you’ve got your shareholders, you’ve got to be able to be financially viable. What have you learned? What kind of tips can you give us about how to make things happen in these kinds of organizations?
Kate Goodrich: I think the reason I’ve been relatively successful in that realm is probably a couple of things. One, I just have a natural curiosity for how things work and more deeply understanding the different perspectives around a particular issue or how something should work. So I spend a lot of time genuinely seeking to understand. And when you do that, people know you’re listening to them. And often we will open up and share how things work but also their viewpoints fairly freely.
And so that gets to sort of the second point, though. I have a real appreciation for human nature and having, I think, being able to sort of put myself in people’s shoes. And I’ll often come into a situation with a bias, just like we all do. But I have learned over time also from modeling mentors like yourself, Harlan, Howie, also other mentors I’ve had in my career who have done that, and be able to gain a much broader perspective and help people align around a common purpose.
Doing that in particular I think has helped to advance whatever it is we’re trying to do. If you can get people aligned around a common purpose, and by really being able to understand what it takes to then execute, to drive results towards that common purpose, has really helped me. That may seem all very general, but actually it really is understanding human nature and listening to people and just being genuinely curious. And that’s the advice that I give others who are trying to navigate very complex situations. And I’ve just found that most of the time, that works.
Howard Forman: You mentioned that outcomes can be better when you’re sort of serving the community in an integrated way and with physician coordination. Humana and many of the other health plans own physician groups at this point, and in your case its CenterWell, and I’m curious, are you able to do your own little natural experiment within Humana to be able to observe whether your physician-owned part of the practice is performing differently than where you’re contracting with outside independent physicians and how so? What is different about that?
Kate Goodrich: So we definitely do have actual results, some of which are soon to be published any day now, that I would look forward to sharing more broadly once they are, that have shown a few things. We have results that show that when we look across all of our Humana members and the types of physicians that are attributed to, primary care physicians that they’re attributed to, that are patients... risk-adjusted of course for clinical conditions and other things, that our patients who see fully capitated physician groups just have better outcomes pretty much across the board, lower hospitalizations, lower ER use, better performance on diabetes and high blood pressure control and cancer screenings.
Howard Forman: Sorry, just for our listeners, explain to them what you mean by “fully capitated.”
Kate Goodrich: Sorry about that. Yeah, so what that means is that the physician or really physician group has taken on accountability for total cost of care for their panel of Humana patients. And often these physician groups are doing that with other payers as well. Sometimes they’re not. Sometimes they have one foot in fee-for-service and one foot in capitated full risk.
And so that really changes how you practice. That really incentivizes true care delivery transformation. And I’ve seen it in action in our CenterWell clinics. I’ve also visited some of our competitor clinics that on the Humana insurance side we contract with, like Oak Street. And there are some commonalities there. So for example, patients have much more time with their physicians. A typical physician visit that my mom goes to for her primary care doctor who is wonderful but lives in a fee-for-service system is 10 minutes. Maybe.
You just can’t, especially for a senior, get all of your needs attended to in 10 minutes. And so what ends up happening is a lot of specialty referrals, for example, or just not getting to all the things you need to get to. So in our clinics, for example, you have 30 to 40 minutes per patient. Our physicians see 10 to 12 patients a day instead of the 25 to 30 that primary care doctors and fee-for-service see.
There is an incentive to manage your specialty referrals. So our physicians use data at the point of care regularly to know not only what are the gaps in care for the patient right in front of them related to screening or what have you, but also, “Okay, I need to make a referral to a nephrologist—who are the nephrologists that are in my patient’s insurance network, because not all of our patients are Humana patients.” We’re a multi-payer practice. And also in the patient’s area where they live, and actually have that information right there at the point of care to be able to make a wise choice for where that patient should go.
There are incentives to minimize the use of low-value care services and to maximize the use of high-value care services. There are a number of things I could go on and on, but it really does feel and look very, very different. Standardized clinical protocols that involve the entire care team in terms of their execution, a variety of things like that.
And by the way, sorry I didn’t mention, we do actually see even better health outcomes, even better performance on quality measures for senior-focused primary care clinics like CenterWell compared to other downside risks. So fully capitated primary care clinics. So there is something about the clinical model that even further helps to improve or is associated with improved outcomes and performance on quality measures than even other fully capitated value-based care providers.
Harlan Krumholz: Where can people see those results?
Kate Goodrich: So we presented them at Academy Health last year, I believe it was in Seattle last year. And they should be coming out, that’s the one I was mentioning. We’ll come out to a publication near you very soon. We’re expecting it by the end of the summer. So happy to share with you all once they’re out.
Harlan Krumholz: I’m just going to urge you to preprint. Preprint your stuff so that we don’t have to wait for the long cycles of peer review. I’m serious. Once you have your thing when you submit, you should be preprinting. Howie knows it’s a drum I beat all the time.
Howard Forman: It’s a good drum.
Harlan Krumholz: So Kate, I want to dig into a topic that we talked about earlier in the show that has a lot of relevance to payers. And I know you’re just not a payer, by the way. I’m not just saying, but there is a function of you, of Humana, which is all about figuring out what to pay for in our largely fee-for-service arrangements still. And that’s around AI. So I talked a bit about Tempus getting this code from the AMA for one of their, and this one happens to be on omics and they’re coming up artificial applied to this, but we’re seeing this all over the place.
I mean in cardiology of course heart flow is basically taking CT coronary angiography and then reprocessing the data in order to come up with an output and get paid for that. But we’re in the midst of a revolution of AI where there’s a potential now for there to be thousands and thousands of new tests that are layered on top of our traditional tests, which are basically about taking existing data produced in one way or the other and maybe in some ways generating the data and then using these algorithms to produce output.
Up until now, a lot of these algorithms, the pitch has been, “Health systems, you should adopt this because it will improve your outcomes.” But of course that’s not a very strong impetus for them because of their, I don’t want to say singular, but their intense focus on the bottom line. If these start getting paid, it will flip the adoption I think from the slow lane to the fast lane, but it has vast implications. Is it being used appropriately? Is it actually improving outcomes? What’s it doing to the overall health budget as a result? You guys must be spending time thinking about how you’re going to determine medical necessity and what’s going to be approved, what’s going to need to be authorized. Because these things are going to be able to be cranked pretty fast.
And a lot of them are cool, very cool. I mean, I think there’s a strong possibility that they will improve outcomes, but many of them have not been subjective, of course, to randomized trials in that way. So how are you guys thinking about this new frontier and how it will be managed on the payer side?
Kate Goodrich: Yeah, a lot of what we’re spending our time thinking about is how we can use AI internally for our own operations and administrative purposes and that sort of thing. Also on the CenterWell side. But certainly also starting to really try to understand how we should be thinking about it on what I’ll call the coverage and what we pay for. So the medical necessity side, right, as well.
When I was at CMS, I learned an awful lot about coverage, and I learned about how we need to actually use research, we need to use evidence to guide our decision making, particularly when you’re talking about coverage for Medicare patients. And frankly, we’re a Medicare Advantage company, so we have to follow CMS guidance. So if CMS is covering something, we have to cover it, but there’s a lot of stuff that CMS does not have an explicit coverage decision around.
We will certainly be following whatever CMS does, but I think we feel pretty strongly that we need to see evidence, we need to really understand whether or not something’s going to work and be safe for our members. I don’t think we probably have—when I say “we” now, I mean the industry—has necessarily all the right and well-defined frameworks around how we should be assessing some of these technologies that can be used for our patients.
So we are very much looking to see what happens around that aspect of it. But as a general sort of principle, what I’ll say is I don’t think we’re going to lower our standards around understanding evidence and impact in making these decisions around coverage, especially because we are responsible for such a large vulnerable population of patients. But we also, I don’t think know exactly what the right framework is yet.
Harlan Krumholz: So let me just add one other follow-up to this. So in diagnostic testing, very few tests have been subjected to randomized trials about outcomes. I mean, some people could say it’s in the interest of people who are paying to continue to elevate the bar of what’s necessary. But if we’ve got evidence that a new algorithm, for example, can replace the need for a downstream test, will we move to it? You’re also seeing this, by the way, I’m talking about algorithms and diagnostic tests, but I mean certainly the liquid biopsies also fall into this area. But in some ways I see tests that say, “Gee, you don’t need X anymore because if I can use a more rudimentary test, but now with AI, I’ve trained it for what the result would be, it can supersede it.”
I really think, and I know you don’t necessarily have the answers and you don’t speak for Humana; you just speak for yourself in this podcast. But I’m just wondering what you’re thinking about what this path will be. Because we do want to make it possible for people to come up with useful algorithms to have a business model so that we can reward them. But we also don’t want every single thing going through that hasn’t been validated and we can’t necessarily trust to be. FDA may authorize it, but the real bottom line is going to be who’s going to pay for it. And I think that’s where I’m seeing kind of this thing, we wrote something, I wrote with Richard Frank and Robert Jarrin, this thing about what CMS is doing about trying to evaluate AI for payment, but I think you guys are the ones who also need to innovate in this area.
Kate Goodrich: Yeah, I think you’re right. And that’s what I mean by trying to figure out what the right framework is to make these decisions. I don’t think we have that yet. Is it that we want to wait for an RCT [randomized-controlled trial] for every single thing? Probably not. That’s just not realistic, and that slows things down. I don’t know what the right framework is, but I think we have to understand where the industry’s headed and probably test that ourselves within the industry.
Harlan Krumholz: Finally, I think, Howie, this is where we really need to get neutral territory where people, stakeholders come together in a noncompetitive space to try to say, “What do we think is going to be in the best interest of society?” I don’t know, it just seems to me that we need to do that.
Howard Forman: What do you think is the future, not just at Humana but nationally, for primary care? Is it that they all start to become under the umbrellas of Medicare Advantage health plans or the majority? What does the future look like for that space?
Kate Goodrich: Well, I don’t know that the answer is everybody comes under a Medicare Advantage health plan. I think it’s really around the way that care gets delivered, which is really dependent upon the financial model. And so we’ve seen models that work. I think I’ve seen a lot of editorials written over the past year that nothing’s really working. It’s not getting better. Well, I disagree. There are some models where things are working and getting better. We actually have the evidence behind that. And by the way, we’re not the only ones producing evidence. There are others out there as well.
We are a part of the primary care collaborative, which is a collaborative of multiple types of stakeholders that are advocating for complete change in how primary care is paid for really more prospective, risk-adjusted payments just by CMS. And that can happen in a variety of ways, but once you start to actually have that stability and certainty around how the payments are going to happen, that allows for more innovation and really genuine transformation of how care can get delivered. It doesn’t happen overnight. But it facilitates it in a way that fee-for-service absolutely never will.
And so I think there probably would need to be further, I don’t know if it’s legislation or regulation around this. I’m really pleased to see some of the models that are starting to come out now of CMMI that are building upon what we’ve already learned that are actually taking some of these approaches.
Howard Forman: And CMMI is?
Kate Goodrich: Center for Medicare and Medicaid Innovation, or the Innovation Center, as it’s called. They have a couple of new models that are just starting that are using these sort of upfront payments to physician practices or to ACOs [accountable care organizations] to allow them to have some of the capital upfront to invest in this care delivery transformation that really needs to happen in order to just improve the experience and outcomes. So I think it’s around further accelerating that type of payment arrangement. At least that’s one answer to facilitate the ability to deliver care differently.
Howard Forman: I want to ask you one last question, but Harlan’s favorite topic for the last two and a half years has been GLP1 and Semaglutide and Tirzepatide, and it is phenomenal, and it’s become my favorite topic because Harlan leads and I follow and it’s incredible to learn about this. You are in a role at a large health plan having to consider how do you provide coverage for these expensive drugs that also have enormous impact on people’s lives. And as Harlan has said, some of that impact is far out, so it’s not necessarily going to save money in the short run. Can you give us a little inkling of how you think about this from your position, not Kate Goodrich, but from your position about how Humana manages this quandary?
Kate Goodrich: I think we’re totally excited this category of drugs. We continue to find new things that it has, can have an impact on that are so positive for patients, that are positive in the short run and they’re positive in the long run. And then we’ll continue to learn more about adverse effects and downsides as we have more and more experience. But generally, I think we’re very enthusiastic about this class of drugs. They are very expensive. That is a challenge. But as an MA plan in particular, we keep our members for seven to eight years on average. So we’re invested for the long haul in our patients.
And so I think we really want to get to solutions where we are able to cover these with minimal cost sharing for our members because of the good that they’re going to do, just not in the short run but in the long run. A lot of the work that I am associated with at Humana is how do we actually get our providers to ensure that our patients are getting guideline directed medical therapy?
Because for some things like congestive heart failure, we know a small percentage of our members are getting four-drug therapy and not every person should get four-drug therapy, but for the ones who should, it’s a pretty small percentage nationally. And that also is true in our data. And we’re trying to actually get these patients on more drug because we know they actually have better outcomes. So I think we are very eager to get to a place where we can do this in a sustainable way. It is for the good of our patients, and that really is our orientation.
Harlan Krumholz: It’s great. It’s great. Thank you so much, Kate. It’s always wonderful to see you.
Kate Goodrich: Good to see you guys too.
Harlan Krumholz: It’s great to have the chance to visit, and we’re so proud of what you’ve accomplished.
Howard Forman: I can’t emphasize, I said it at the beginning. I’ll say it again right now, you continue to contribute to this campus in so many different ways. You talk to students, you have spoken on campus by Zoom. I appreciate you very much.
Harlan Krumholz: He’s focusing on the Yale contributions. I’m saying focusing on the nation…
Howard Forman: I know he is, but I want to continue to thank you.
Kate Goodrich: I love being affiliated with you all in one way or another. It makes me happy.
Harlan Krumholz: Well, that was a terrific interview, Howie. Like I said, she’s one of my favorite. So upbeat and breath of fresh air and so glad she’s working in industry honestly. There are lots of good people in industry. She’s among them and in a leadership position. But let’s get to your topic today. What’s on your mind?
Howard Forman: I think this is the third time we’re covering this topic in the three years of doing the podcast. Beginning in fall 2024, Johns Hopkins Medical School will offer free tuition for students pursuing an MD who come from families earning under $300,000 a year, a figure that covers about 95% of all Americans. Additionally, Hopkins will cover living expenses on top of tuition and fees for medical students from families that are up to $175,000, a threshold inclusive of the vast majority of families in the U.S. Nearly two-thirds of current in entering medical students at Hopkins will immediately qualify for either free tuition or free tuition plus living expenses.
So Michael Bloomberg, who made this donation, becomes the latest benefactor of medical schools to make this extraordinary contribution. Joining NYU, which we talked about, and Albert Einstein, both schools we talked about at the time of those gifts. And allowing students to graduate with less debt seems like a noble effort. And I think it’s a positive step, particularly because in this case, they’re trying to limit this to the nonwealthy class. And I hesitate to call this group middle-class since these thresholds are still in the upper deciles of households. But I guess you can call this upper, upper middle class.
If the objective is only to unburden a group of elite students, then I think this will be effective. If the objective is to raise the stature and competitiveness of Hopkins, I think this will be effective. If the objective is to learn more about how this incentive changes outcomes for the school, it may be effective. But if the objective was to train more people in primary care or to recruit a more diverse workforce or to improve health equity per se, there’s little evidence that this particularly will do that. What is likely to happen is that the upper echelons of students will seek out these free schools. More and more other elite institutions, including ours, will have to devote more endowment or find a donor to alleviate the tuition burden on similar students in order to compete for them.
And that state schools and also-ran schools, and I don’t mean that to be disparaging, but I’m just including the vast majority of schools, will continue to have the majority of medical students in this country continuing to graduate with considerable debt. And don’t even ask me about offshore medical schools, which make up an increasing number of U.S. physicians and their truly enormous debt.
So by comparison, for our listeners, Yale’s tuition and expenses right now are over $100,000 per year. And Yale does do an awful lot for the lowest-income individuals. Those who qualify for federal financial aid, they leave here with no more than $40,000 in debt. But what Bloomberg and Gottesman and Langone have done for these schools is generous and well appreciated by the students who are fortunate enough to go to Hopkins, Einstein, and NYU. But we would do well to think about how such largess can best be spent because buying prestige is nice, but it’s easy. Helping to transform medicine is hard. And I’m really curious to hear your thoughts because I know we’ve talked about it before, but I’m just wondering, are we witnessing something that’s a social good or are we witnessing something that is just about making a few schools even more elite?
Harlan Krumholz: I’m really glad you brought this up today, Howie, because it was actually another thing that was on my mind this week, which is, was this built as a social engineering experiment, which is that we’re trying to get more people into certain specialties or what is it exactly? Or like you said, is it really about elevating the profile of Hopkins, helping them to compete better against a place like Yale?
And even when it comes to scholarship money, I mean, you could say no matter what your background is, if you’re going to go into one of the highest-paying areas of medicine, the investment in medical school is going to pay off. There are probably a lot of people will be willing to front you the loans because of the returns that are going to be made. Whereas there are other areas of medicine, and let’s just be honest, everyone in medicine does okay compared to average Americans.
So we’re all fortunate, but this is about the gradient that exists within the field, which puts pressures on people to move in certain directions with regard to career decisions. And so within the field, pediatrics, for example, is having trouble filling spots. And we’re seeing areas where it just is a reality for people to recognize that over the course of their lives, they’re making decisions which have immense financial consequences. And if they are not encumbered by loans, they might be freer to make those choices.
Howard Forman: That is the hope. Everybody acts like that’s what’s going to happen. But just what I see at Yale and other places is that the most elite students go into dermatology, neurosurgery. Not that there’s anything wrong with it, they’re making great advances there. But I don’t know that it’s advancing sort of as you said, the societal goals or initiatives.
Harlan Krumholz: Here was the idea I had just quickly at the end was that everybody gets a loan, and then the degree to which the payback is predicated on what your income is in the field that you go into. So that if you end up going into a field that’s not paying as much, then they adjust, they defray the loan by a certain amount or the interest rate varies depending on that. The payback is dependent on what your salary is and so that no one is burdened. You can make choices and not feel burdened, but that everyone has a responsibility. And that the question is, can we construct systems like this that both alleviate the burden of the debt but also in some ways level the playing field on the fields so that we can allow people to pick what’s in their heart, not necessarily what they feel like they must choose in order to live a certain—
Howard Forman: Others have suggested that we could pay residents differently. There are various ways in which you can do that to encourage that and to do the engineering side of things. But for the moment, I think what we’re going to see is a race for the top, top medical schools to all be even more top.
Harlan Krumholz: Yeah. Well, thanks for raising it. You’ve been listening to Health & Veritas with Harlan Krumholz and Howie Forman.
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Harlan Krumholz: Health & Veritas is produced with the Yale School of Management in the Yale School of Public Health. Thanks to our researchers, Ines Gilles and Sophia Stumpf, and to our producer, Miranda Shafer, amazing every week. Thank you. Thank you.
Howard Forman: Grateful for them.
Harlan Krumholz: Talk to you soon, Howie.
Howard Forman: Thanks, Harlan, I’ll talk to you soon.