Saumya Sutaria on healthcare spending
From State of the West 2016: Saum Sutaria · · Stanford Institute for Economic Policy Research (SIEPR)
“Fundamentally, from my point of view, the issue is not what we spend in healthcare. Ultimately, you could take a view that this is the most important retail good we will consume. The issue is the return we get on that healthcare expenditure.”
On , Saumya Sutaria, Chairman & Chief Executive Officer at TENET HEALTHCARE CORP, spoke about healthcare spending during State of the West 2016: Saum Sutaria on Stanford Institute for Economic Policy Research (SIEPR).
About Saumya Sutaria
Saumya Sutaria, then a senior partner at McKinsey & Company, spoke at the 2016 State of the West symposium about health care policy and the U.S. health care system. He described himself as a "reformed cardiologist" who became interested in health care economics after observing what he considered a misaligned incentive structure in clinical practice. Sutaria argued that "healthcare is not Obamacare" and characterized the role of government in health care as "less than productive with respect to machinations that occur." Sutaria stated that the U.S. health care system is financed through insurance, personal savings, and subsidies from government and employers. He said that Medicare and Medicaid reimbursement "underfunds the unit cost of what is consumed" and that this is cross-subsidized by a shrinking employer-sponsored insurance pool, which he described as "irrational and coming to a breaking point." He noted that the health care sector had returned more to private equity firms than any other sector, and he emphasized that the core issue is not the amount spent on health care but "the return we get on that healthcare expenditure." Sutaria expressed encouragement about "demand side interventions" that treat health care more like a consumer good, but said these must be paired with greater price transparency and understanding of value. He advised following capital flows as an indicator of what will change in the industry "regardless of policy and regulation."