Navigating the Future of Healthcare (ft. Dave Johnson)

Thanks for tuning to Digital Voices Podcast, where we chat digital transformation, challenges, and opportunities across healthcare and life sciences. And now, your host, Ed Marx.

Hey, it's Ed here. Welcome to another edition of Digital Voices, and thanks for listening. There's so much great content to listen to, like that comes from Dave Johnson. Welcome, Dave.

Hey, thanks, Ed. Great to be with you as always.

So we're going to talk about Dave's podcast. That's where I was headed for as I just jumped straight to Dave. And because he's got some great stuff out there as well. So there's a lot to choose from, lots of great stuff. And again, you've chosen some time with us and we'll make it worth your while. There's no commercials, no ads, no sponsors, just pure content. So Dave, I'm really looking to talk a lot with you about what you're seeing in the industry. And also you've got a, you're already author and we're going to talk about your new book as well. So super, super stoked, but you're a CEO of Foresight Health and you're a keynote speaker, author, strategic advisor to many. And you've been around a while and you know how to have fun because I've been to some of your virtual parties and there's always a big, big hit. So I can't imagine what one of those parties are like in real life. So. I'll have to, I'll have to get that experience sometime. But anyways, it's so good to see you and have you on Digital Voices.

Hey, well, I love the format, Ed. Real people, real chat, no infomercials, just the good stuff. Uh, congratulations. I bet that jumps your listenership by, I don't know, 200%, 300% right there.

Yeah. You know, cause I love podcasts. I think a lot of people, it's a great way to take use of time. But man, I'm on the fast forward button. As soon as those commercials come, I've got it timed out. You know, I know exactly how long it's going to be. But so, but I stopped listening to some of them when I run because I can't stop and fast forward. So yeah, you're right. I think it helps a lot. But Dave, you and I have known each other for a few years, obviously been both in the industry for a while. Then I'm super familiar with Foresight Health. I've read your first book, listened to some of your content. I receive your newsletters. We'll put all that information in the show notes because after this, if people don't already follow you, Dave, they will want to. But the most important question on our podcast is what songs are on your playlist?

I'll give you 2. The first is September by Earth, Wind& Fire. You know, not only the greatest dance song of all time, but it happens to celebrate the 21st of September, which is the day I was born. Who gets that lucky, right? To have such a fantastic song celebrating their birthday. So that's, that's number one. And number 2 is Fruitcakes by Jimmy Buffett. I am sure they will play it at my memorial service. Remarkable, remarkable amount of wisdom covering topics ranging from human nature, the government, relationships, religion. You know, there's a fine line between Saturday night and Sunday morning. But most important of all, Ed, uh, just like with you and me, there's a little bit of fruitcake left in every one of us.

Yeah.

So good words to live by. And by the way, regarding playlists, and you mentioned, uh, some of our, some of our virtual parties during COVID we did a parody once a month on usually a '70s song and a healthcare topic. You know, Obamacare is here to stay. Um, You remember Disco Inferno? So ours was Churn Baby Churn, Revenue Cycle. So anyway, if your listeners like that kind of thing, you can go to our site and listen to, listen to our playlist with our parodies on them.

No, I love the creativity with all that. Yeah, those are, those are always fun to listen to. So that's super cool. And yeah, we talked about, you mentioned mantra. Are there words that you live by? Life message? Kind of guides you?

Well, you know, having worked in healthcare as long as you and I have, it's hard not to become cynical. So I, I walk that fine line between cynicism and skepticism every day. But personally, and actually this goes all the way back to when I was a Peace Corps volunteer and, uh, literally is the toughest job you'll ever love. And I was teaching in Africa, teaching classes with over 100 students and I just tried to be a little bit better every day. So how do you, how do you get a little bit better and be a little bit better as a person every day? And that worked for me then and still works for me.

Yeah. Imagine if the whole world was like that. Right? Yeah.

Well, John Lennon, right?

Yeah. I just, I finally have all the times I've run through Central Park, probably 3 or 4 times a year. I never made it to the John Lennon Memorial and actually This past week, I made it. Imagine that.

Strawberry fields forever.

Yes. So tell us a little bit more about yourself. We already know a little bit. Obviously you've been in healthcare a while. You've written some books, you have podcasts, you, you do a lot of stuff. But yeah, well, you're in the Peace Corps as well. Yeah. Tell us more.

Yeah. So, and I know you want to hear a little bit about Foresight Health. Maybe I can blend those 2 together a little bit, but if you go way back, I was, I was born in Minnesota and we moved to Rhode Island when I was 12. And so first 12 years of life, formative, uh, and they made me lifelong Minnesota Viking and Minnesota Twins, made me a lifelong Minnesota Viking and Minnesota Twins fan. I wish I weren't. There's a lot of losing associated with that. Yeah.

Well, not this is the season. This is the season. Vikings.

Yeah, there you go. Well, you know, the best, being a sports fan, the best thing is when your team is overperforming, which the Vikings are certainly doing right now. So you never know. And the Twins did win World Series in '87 and '91, but otherwise it's been pretty slim pickings. We moved to the East Coast when I was 12, and that was quite a culture shift. I think the closest thing I'd had to A co-ed experience was dancing with girls in gym class in Minnesota. And then suddenly I'm in Rhode Island and I get invited to a party. Girls are wearing makeup and nylons and they start playing spin the bottle. And anyway, whole different world out east. And the things I liked to do in Minnesota, I was a Boy Scout, a lot of camping, fishing, that type of thing. They weren't cool in Rhode Island. So I started getting into soccer and sailing and so on. So, you know, early on sort of getting used to different cultures and Just, you know, kind of a normal childhood growing up in a middle-class family. On a more kind of serious side, as I was finishing high school and starting college, my family went through some fairly turbulent times. I had a brother with severe dyslexia who was always in trouble. He committed suicide. My parents got divorced, and I think You know, I went to Colgate in upstate New York as undergraduate, and I think part of it that the family— I was just trying to figure things out, and that pushed me into the study of English literature and theology and religion, and probably into the Peace Corps as well. I really just was trying to figure out why the world was so topsy-turvy.

Yeah.

And I think that's true of my remaining brothers and sisters. And so When I went into the Peace Corps, at the time, I thought the life of a college student was fairly self-absorbed, and it was exciting to think about doing something that wasn't entirely for myself. At the same time, I was excited about living in a different country, different culture, and traveling. So it was a mix of kind of selfish and unselfish reasons, which is probably how the best things in life are done. And I loved the Peace Corps. I thought I wanted a career in international development, but I didn't have any skills. I told you I was an English major. What's an English major good for? By the way, the answer is wait and see. And so I went back and got a public policy degree at Harvard at the Kennedy School in the mid-'80s. And at the time it was far and away the most quantitative professional program at Harvard, far more than the business school or or the law school or any of the professional schools. So we were doing microeconomics with calculus, econometrics, statistics, analytic modeling. One of McNamara's whiz kids was the one that was teaching us analytic methods. I, and probably it was a small class, 75 people, and probably 80% were either math or economics majors. And I was good at math, but I hadn't had a math class since high school. And I'd had one intro to Micro course in college. So for me, it was almost like learning new languages. You know, that which doesn't kill you makes you stronger. So ultimately it turned out I loved all that stuff. And when I graduated from the Kennedy School, for a while I was a U.S. presidential management intern, but ultimately ended up almost by accident as a, in a career in healthcare investment banking. And That's where I spent the most, most of my career. I was, um, uh, got $30 billion in bond issues, asset liability management, derivatives, and all the things you do as an investment banker to large, usually nonprofit health systems like the Cleveland Clinic where you used to work. And, and, you know, by the time, uh, uh, and I had a very successful career, you know, 25-plus years. I'm sure that's where we first met each other, probably through Kevin Roberts. And, uh, and I, uh, by the, by the time it was over, uh, my banking career was over there, you know, it's usually got a push and a pull. And by this point I'm in my mid-50s and I, um, I didn't want to do the transaction work. Uh, I'd started writing a monthly column on market-based health reform. I had a pretty big following. I was really enjoying that. But I'd also come to the conclusion that my clients, the large nonprofit health systems, were a part of the problem. And it was a limit to what I could write about when I was working for the bank and they were still paying my paycheck. So, right. I started to think about life after banking and hired a, a coach to help me through that life after healthcare, healthcare investment banking. And that was, that was a really interesting exercise. He'd call me on my bullshit. I'd fight back. And by the end it was a full contact sport. And for our last session, he came in and told me that I wanted to write a book. And I told him he was crazy, except in much more colorful language than that. And we went at it for the better part of 2 hours because I really thought it was a bad idea. And he was a former hockey player and he wasn't going to let it go. It was a Friday afternoon and I said, I finally said, okay, I'll, I'll think about it. And I went home and said, well, gosh, what if he's right? What if I do want to be, you know, a full-time writer, write, write books? Um, and why would anybody care what I have to say about healthcare? And I sat back and thought about my rather unusual background, English literature, you know, Peace Corps.

Yeah.

Public policy school, investment banking. And I said, you know, this is such a complex, nuanced industry. Maybe it needs some combination of literary sensibility, cultural sensitivity, public policy acumen, and market expertise to make sense of it. And I'd done enough writing at that point that I found myself shifting between these 4 lenses all the time. So, well, maybe because of my somewhat unusual background, I'll see some things that others don't. And anyway, that was enough to kind of launch Foresight Health and write my first book, Market Versus Medicine. There've been 3 now. The 4th is coming out next week, or I'm not sure when this is going to broadcast. It's coming out November 13th, and we've got a 5th one. So imagine that, you know, I'm essentially a full-time writer now. And that led me to create the company. And we have a, you know, we're a boutique healthcare media and advisory company. And we, I think we hit above our weight. And, you know, you talk about real conversations with real people. What I care probably most about is just the integrity of our content. I don't want anybody to think that we're pulling our punches. Agree, disagree. Yeah, you're getting our honest take on what's going on in the marketplace.

Yeah, no, I love that. It's a great, great story on how Foresight Health came to be. Are the challenges different than when you first started? You know, you were talking about how you knew that part of the problem was big, giant, you know, not-for-profit systems. And so The things that we're battling today, are they the same things we battled 10, 15 years ago?

Yeah. Or even 50 years ago.

Yeah.

In writing the new book, The Coming Healthcare Revolution, I stumbled across this cover story from Fortune magazine, January 1970. And I, you're old enough to remember when Fortune was the the premier business publication in the country, big folio-sized issues and on every CEO's desk. Anyway, this one was titled Our Ailing Medical System. And in the letter to the editor, sort of giving an overview, and I'm just going to read you a few sentences from, you'll, you'll be blown away, Ed. American medicine, the pride of the nation for many years, stands now on the brink of chaos. To be sure, our medical practitioners have their great moments of drama and triumph, but much of U.S. medical care, particularly the everyday business of preventing and treating routine illnesses, is inferior in quality, wastefully dispensed, and inequitably financed. Medical manpower and facilities are so maldistributed that large segments of the population, especially the urban poor and those in rural areas, Get virtually no care at all, even though their illnesses are most numerous and, in a medical sense, often easy to cure. Whether poor or not, most Americans are badly served by the obsolete, overstrained medical system of medical system that has grown up around them. Helter skelter, you know, continue. It's time for radical change. And you change the word manpower to personnel, and this applies verbatim.

My God.

Except in, yeah, except in 1970, healthcare was 7% of the economy. Now it's 18%. Obesity, adult obesity was 15%. Now it's 40%. I, I think we're confronting the same problems, but our system hasn't adapted to what we know is wrong. And the new book, The Coming Revolution, um, My, I, and my, I've got a co-author, Paul Kucero, the chair and former CEO of Amedisys, the home health company. And our opinion is that healthcare's gonna change more in the next 10 years than in the last 100 years. And that change is gonna come more from the outside in than the inside out because the industry itself has proven incapable of adapting to what the country needs, which is Essentially more investment in health so that we don't need as much healthcare. So in terms of what are the issues today, I mean, they're the same issues. Yeah. If I think the big difference, as I think about the players in status quo healthcare, you know, you got the big payers, the providers, the suppliers. Big Pharma. I think healthcare has historically been very good at fending off change from the rest of society, and it's enabled the industry to go from 7% in 1970 to 18% of the economy overall. And we do that by stealing resources from other parts of the economy. My belief is healthcare is fixable, and if we're able to do it, uh, we can release enormous amounts of resources to pay people more money to invest in more innovative industries to fund vital societal needs. But absent that, we're just going to keep spending more money to treat an ever sicker population that's increasingly isolated, less productive, less happy. And nobody wants that for the future of the United States of America.

Yeah, that, it's a sobering analysis, but accurate and what can be done. So, so if you're, if in the audience, you know, largely executives, mostly providers, but some payer and pharma and life sciences and medtech, what can we do now? Yeah.

Well, I think the first thing is just open your eyes. I mean, look at these massive macroeconomic forces that are coming at the country and particularly at this industry. Demographics, right? We've got an aging population. With increasing chronic conditions. So the demand side is, is, but there's also a supply side and a payment side. And in 1965, when Medicare came into being, we had 10 workers for every retiree. Today, that's closer to 3 and on its way to 2.5. Well, we aren't going to have enough workers to treat all the people with the chronic conditions. old farts like you and me. Uh, and we can't tax people enough to pay for it. So unless we come up with a better way of sort of managing these relationships between disease and treatment and care and prevention, we're on a very dangerous path. The second force is funding fatigue. And I think we're at an inflection point in and around 18% of the economy in terms of what we can afford for healthcare. And again, as I said, if we could figure out how to do it for less, have the same or better healthcare for less money, we'd free up enormous resources to do all kinds of great things. The third are the chronic pandemics. Our systems designed to be hospital-centric, physician-centric, disease-centric. Which really addresses acute illnesses and episodes. And we do a pathetic job really as a society in preventing and managing chronic disease. And to the point where 90% of healthcare expenditure, according to the CDC, goes to treat individuals with either chronic and/or mental health conditions. And we're losing that war on both fronts. A more galvanizing force are technological imperatives and This decade has seen 2 of the, the rise of the most amazing technologies in digital. We're on the road to artificial general intelligence, probably in 3 to 5 years, has profound implications for society as a whole, but particularly for healthcare. And this is your area, Ed, because the industry's lagged other industries in its adoption of technology. So the ability to use technology to solve real problems. Including these sort of personnel-related issues, is profound. And then combine that with synthetic biology and the two together create a world potentially where 80 to 90% of what we ask doctors to do now, which is diagnose illness, is better done by machines. And we have the ability potentially to identify individuals at risk of chronic conditions, you know, cancers, heart disease, Alzheimer's, 3, 4, or 5 years in advance of the onset of the disease when it's, when it's much more treatable. So those forces together suggest a radical shift in resource allocation. You know, today we spend 3% of the healthcare budget on prevention. What's that in 5 years? What's that in 10 years? What's that in 25 years? It's not going to be 3%. 10, 15, 25, 30%. Whatever way you look at that, it's going to be a massive impact on an industry that's sort of used to having its own way and spending what it thinks it should spend on what it wants to spend it on. And then the last force is pro-consumer, pro-market, reforms, things like interoperability, transparency, work against monopoly and monopsony pricing power, which we have in several of the healthcare submarkets. And any one of those 5 forces is powerful. Together, they're irresistible. And that, that's actually starting to crack this massive healthcare industry, the largest industry ever created by human beings. And it's creating opportunities for market-driven, you know, market-driven innovation focused on value, on consumerism, on getting jobs done for customers to come in and fill those cracks. And at some point, we're going to get to enough aggregate scale of these pro-value, pro-consumer, pro-health companies that they'll change the market supply-demand economics. So, you know, buckle up. That's the world we're in. So from a healthcare, you asked what can you do is, so first have your eyes open. Don't assume tomorrow is going to be like today. And this industry is remarkably defensive. It hunkers down and waits for the world to bend to its will rather than the other way around. And if you believe what I'm saying here today, that approach isn't going to be possible. So how do you become part of the solution? How do you improve healthcare delivery for the ultimate consumers of healthcare? How do we roll back these really negative trends relating to life expectancy and chronic disease and lack of health in the country? How do you be a part of that? You know, be the change that you want to see in the world. And I got to tell you, Ed, the one thing that drives me It almost keeps me from going to conferences, is when healthcare executives from health systems and insurance companies get up and admire the problem, but then don't do anything about it. I call that Mafa, M-A-F-A, mistaking articulation for accomplishment. And we're just not going to take it anymore. You know, you can't get away with talking a good game. You actually have to start playing one. So anyway, sorry to ramble on, but that's my soapbox. I'll get off the soapbox. I promise.

So that's super interesting and a good reason for everyone to buy the book. 'Cause I know that you cover these and more forces in there. I think you have 10 overall. We talked about 5. And Gabe, do you also offer like, okay, again, I'm a, what's a practical thing if I'm an executive of a payer or a health system? What are some things I can do other than pontificate at a conference?

But we say the disruptive innovation that's going to bring down the castle is something we call 3D WPH, democratized and decentralized distribution of whole-person health. And so that's 3D WPH. And there are all kinds of examples where organizations that do that generate better outcomes, keep people healthier, cost less, you know, better outcomes at lower costs with better customer service. So wherever anybody sits in the healthcare ecosystem, thinking about how they can be a part of this movement to decentralized and democratized distribution of whole-person health, I think is— that'll be the difference between success and failure for many companies.

Yeah, I love that. And you're right, we've just been kicking the can down the road for years and years. And I think because of the these market forces that you talk about in the book and have articulated here, um, are, are forcing this change in the next 10 years, you know, so we're going to have you back in 10 years, Dave, and we're going to review and see how it went. Okay. It'd be kind of fun to do it in, in, you know, in 2-year increments, like see where we are.

Absolutely.

Because I agree with you, it's not sustainable. But then again, you know, you read that article from 1970 and, uh, talking about the same issues today. So. But I think you're right. We didn't have the tech advancements that we, we have now. We didn't have the funding fatigue, the, the other, uh, demand side, supply side things that you spoke about. So, yep, I will put in the show notes where people can find your book, but, uh, tell everyone how they might find you so they can take advantage of all the resources.

foursigthealth.com. So that's the number 4, S-I-G-H-T health.com. And go to our website. It's all like yours. It's all content. There's no advertising. It's all free. And, uh, we want people to be part of the coming healthcare revolution, make this country a better place.

Yeah, I love your passion, Dave. And I love how you're helping others try to get ready, not just get ready because it's here, but take action. So, and you do it in a convincing way. So I wanted to spend more time with you talking about leadership and other things, but we'll just have to have you back sometime. Dave, thank you for being a guest. Okay. Digital Voices.

Thank you. It was fun.

Thank you for listening to Digital Voices Podcast with Ed Marx. If you enjoyed this episode, subscribe on your preferred streaming service and leave a rating and review. And most importantly, thanks again for listening.