Untangling Our Complex Healthcare System
With Etan Walls, Eleven Canterbury Consultant and Healthcare Expert, and Dan Martin, Eleven Canterbury Program and Relationship Manager
Summary
In this thought-provoking episode of Conversations With the Experts, healthcare expert Etan Walls unpacks the complex realities of the U.S. healthcare system with clarity and candor. With more than 20 years of experience spanning physician practices, hospitals, and medical coding, Etan brings a rare insider’s perspective on why healthcare costs have soared, and why patients often don’t see the value they deserve in return.
He breaks down systemic inefficiencies, explains the hidden costs behind billing and insurance, and likens the process to shopping at a grocery store where every item has its own secret code, until the bill arrives, leaving patients stunned and confused. Etan also sheds light on the political forces that keep the system entangled, while offering practical strategies patients can use to better navigate and manage their own healthcare expenses.
Above all, Etan champions the push for greater transparency, so that patients know the price of care before they receive it, aligning with the principles of the No Surprises Act. His insights not only reveal why change is so difficult, but also how informed individuals and forward-thinking leaders can help drive it.
Transcript
Dan Martin: We’re talking today about healthcare, something that’s very important for everybody at some point in their life. It’s a really interesting subject. Over the past couple of decades, the largest contributor to domestic product has been healthcare.
We’re fortunate to be speaking with Etan Walls, who has spent over 20 years working in all aspects of healthcare, from physicians’ offices and hospitals to insurance practices and medical coding systems. He’s going to help us understand what’s happened, why it’s happened, and what we can do to make it a little bit better. To that end, he has written a book, “The Mega Factory of Healthcare: Retooling the Machine For a Healthier World.”
So, Etan, when I moved back to America from Zurich, which is known to be one of the more expensive places in the world, there were only two things in Santa Barbara, California that cost more than they did in Switzerland. One is water. We don’t do water well here in California. The other is healthcare. It seems like we have a situation here in the United States. Am I accurate? Do I not understand how it should work? Or is it just confusing?
Etan Walls: You’re spot on, Dan.
I read recently that the per capita cost of healthcare in Zurich is around $9,000 per person. And, in the US, it’s closing in on $13,000 per person on average. And Zurich is above the average for most countries in the world. Most countries’ per capita costs are around $6,800 per person.
So yeah, we’re much more expensive than anywhere else. We spend a lot of money on healthcare in the United States.
Dan Martin: We spend a lot of money but we don’t necessarily get value for the money in the sense of objective metrics, a lower infant mortality rate, or longer lifespan, or even something more subjective, customer satisfaction. Do we get anything for all we’re spending?
Etan Walls: I think that, if you are at the higher end and you’re spending money out of pocket, you do get something for it. But it’s a little bit difficult to get something from it when you don’t understand the economics of it. You know, healthcare has become jobs bills for the US Congress. Healthcare is driving the economy in many ways.
So, no, I don’t think overall we’re getting what we’re putting into healthcare.
Dan Martin: So you say it’s jobs, bills?
Etan Walls: Congress is incentivizing states, or previously has incentivized states, to ensure that people are working.
And because healthcare has gotten so big and is such a big part of our economy, it is a major employer in the United States. Manufacturing has gone away. It’s hopefully coming back, but healthcare is driving the economy, and the ancillary companies and organizations that feed into healthcare just keep on driving that economy around healthcare. And that’s why book talks about this mega factory because it’s so complex.
You think about a hospital. A hospital has employees in the hospital, but then they have vendors that feed into the hospital. They have insurance companies that are paying their employees because they are covering patients who are being seen in the hospital. There are doctors groups that send patients there. There are food vendors around the hospital. And on and on and on. You think about the old car factories in Detroit, in the forties, fifties, sixties, the economy around the industry was just as important as the industry itself.
Dan Martin: It seems to me that to get a complete solution to your healthcare problem, you’ve got several different entities, providing services. They’re probably all working to optimize their little piece. Is there anybody who cares about optimizing the entire solution to make it more effective?
Etan Walls: Well, no, there really isn’t anyone looking at the whole thing right now.
Congress thinks that they look at the whole thing, but every time they touch healthcare, something breaks. You know, the Obama administration tried to build exchange plans to give healthcare to more people. But what ended up happening is that the trade-offs around that led to massive consolidation within the industry, which raised prices.
Look at some of the things that the Trump administration does; we’re reducing fraud. That’s great, ensuring that the Medicare provisions are correct. But on the flip side, people who shouldn’t necessarily lose coverage are going to lose coverage because the administrative burden is so high.
So, I think that when you look from a black and white perspective, the trade-offs are fine, but the reality is that there are humans in the middle of this. And trying to decode what’s going on in the world of healthcare is very difficult. And if you’re just one person without the resources to be able to understand that, you really need advocates around you to ask for help.
Dan Martin: Who do you ask for help?
Most of the things you buy, you can look at the prices, and you can compare the options. You can make a selection. But I went to get cataract surgery, and the bill had absolutely nothing to do with what was actually paid. The insurance company paid a very small fraction of what the bill was. The whole thing is massively confusing. Are there things I could have done?
Etan Walls: The first thing that anyone should understand is the payment model within healthcare. Hospitals, doctors, and insurance companies are incentivized and penalized based upon the outcomes, or “ documented outcomes” of patients. They bill out using codes, called CPT codes, and they attach a diagnosis to each one. Then they get a payment back, and, not to get more complicated, there are other codes that hospitals get.
The best analogy I can give about how it works is if you walk into a supermarket, like a very large supermarket, and there are aisles of food. Down each aisle, think about that as a specialty, okay? And each item on the shelf is one code. One code of a procedure, one code of a test, one code of a consultation.
And think of you going down that aisle. You’re going down the primary care aisle. You’re getting a well visit. That’s one code. And on top of that is an EKG and a blood test, and an eye test, and a consultation about smoking, and maybe a consultation because my BMI is too high, right?
And so, I’m taking the codes off the shelf, and I’m putting them in my cart, and I’m walking up to the cash register, and I’m walking out of the store. That’s the payment model right now. That ‘s the way it works. But then, about a month later, you get a bill in the mail for that, and it’s like $5,000 for all of those things that you took off the shelf. And you look at the itemized bill, it’s $5,000, but then the hospital pays like $400 for that bill because that’s the contracted rate, and then your responsibility is $20. So we don’t walk in getting an itemized bill of what you had done and what the real cost is, and what your insurance company is paying. It comes later in what’s called an Explanation of Benefits. And to most people, it is like Sanskrit. They don’t understand what’s going on. So what I tell people is, think about it like the grocery store, and all of those codes are the things that you took off the shelf. You just bought the groceries a month ago.
Dan Martin: It does explain what a friend of mine who works in an insurance company told me to do whenever I don’t like the reimbursement from the insurance company: just call them and say there’s been a coding error. And just keep saying that until they change the code, and then it will be fixed. Although it doesn’t work all the time.
It’s a really complicated situation. We could talk about this some more, but I think you’ve highlighted the reason for the complexity and how we’ve gotten into the situation.
We may want to think about what we do; what do we do next? Are there some ways you can fix the situation? It seems like everything Congress tries to do makes it worse.
Etan Walls: Yeah, I’d love to get lobbying out of healthcare. I’d love it not to be a congressional issue. I’d like it not to be a political football. I’d love to just get it out of the world of politics. I don’t know that that’s possible because Medicare is such a huge line item, and I don’t know that it’s going anywhere. I’m not necessarily a believer in socialized medicine. I don’t know that it will work in this country because we have a capitalist republic, and people really want what they want.
There have been plans to create groups of patients called cohorts. We’re going to reduce costs and get them where they need to be. That’s the thinking sometimes with insurance companies. The problem with that thinking is when the patient has choices, they want to do what they want to do. And unless they’re part of the conversation, it never works. It really hasn’t been shown to work unless there is no choice for them.
So what should we do? Understand your EOB, understand your Explanation Of Benefits. Really understand who your doctor is working for. Is it a private equity firm? Is it a hospital? Are they independent? That matters. An independent group will be more flexible with you about bills and ensure that you have an understanding of what’s going on. A hospital and somebody who’s owned by a private equity group may take less time with you to explain what’s going on with the bill.
If you’re going in for a procedure, understand what your costs are going to be before you go in. There’s a thing called the No Surprises Act, which ensures that people get informed of the costs before they go in for any procedure. And you can challenge the bills if they don’t show you an itemized list before you get rolled in. Those are just two quick tips.
Dan Martin: Thank you very much, Etan. It’s really been a pleasure talking to you. Very enlightening.
Etan Walls: Dan. Thank you.
