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Obama Adviser's Roller Coaster Ride for Healthcare Reform

Story by
Nancy Joseph
September 2010Perspectives Newsletter

Robert Kocher (‘94), an adviser to President Obama during the crafting of healthcare reform legislation, will return to the UW to speak about healthcare reform on October 20, with visits to classes and a free public lecture in 220 Kane Hall at 7 pm. (Advance registration requested. Click here for registration information.) 

Kocher comes from a long line of Huskies, including his father, grandfather, and great-grandfather. After earning UW bachelor’s degrees in zoology (now biology) and political science, Kocher earned an MD from George Washington University and completed his residency in Internal Medicine at Beth Israel Deaconess Medical Center and Harvard Medical School. His most recent position was as Special Assistant to the President for Healthcare and Economic Policy and a member of the National Economic Council.

Robert Kocher

"I was fortunate as an undergrad to gain early exposure to many of the tools that have been instrumental to me in the Obama Administration," says Robert Kocher

Did you always envision a career in healthcare policy?

I came to the UW knowing I wanted to go into medicine, but I also was interested in government and political science, so I pursued a double major. As it turned out, I’ve been able to blend both interests in my career in ways that I never would have anticipated as an undergrad. The UW prepared me well. I took political science courses that focused on game theory, which I found really intriguing as a young student. That area, which in many ways was a precursor to behavioral economics, has become very important in policy making, so I was fortunate as an undergrad to gain early exposure to many of the tools that have been instrumental to me in the Obama Administration. 

How did your role in the Obama Administration come about?

As a partner at a consulting firm, McKinsey & Company, I led their health economics research in the McKinsey Global Institute. My focus there was to understand what drives the high cost of US healthcare. I’ve spent many years studying the economics and economic incentives of the US system and how it compares to others around the world. I also worked in about 20 different countries on healthcare policy and strategy, giving me familiarity with how other systems approach similar challenges. These experiences enabled me to gain a great deal of perspective around how to address cost, quality, and access to inform the US debate. Much of my focus on the National Economic Council was on how to finance healthcare reform, how to reduce the rate of medical inflation, and how to redesign the delivery system to make it higher quality and more accessible for patients.

Has your background as an MD made a difference?

I think it’s helped a lot. Very few people in policy making have ever seen patients, experienced what the practice of medicine is like day-to-day, and understand how hospitals work. It has given me a much richer understanding of the implications of policies we’ve been debating. And I think it has helped me understand the needs of patients when it comes to policy. We would all benefit from more doctors who have clinical experience taking an interest and spending time in the public policy arena. 

Did you have any hesitation about taking on such a public role?

No. It was a once in a lifetime opportunity to join a new administration at the very beginning, with a president who stated during his campaign and in the transition that he planned to attack healthcare in a fundamental way. And I knew my colleagues would be some of the smartest, most inspiring, and intellectually curious people that I’ve ever had the chance to work with.

Were you prepared for the roller coaster ride of the healthcare reform battle?

I hadn’t worked in government before, so I didn’t have a lot of expectations. I found it energizing more than stressful. It was a peculiar privilege to be involved in policy making that was front and center in the national debate and consciousness. It was remarkable to observe the coverage from the inside—reports of meetings and discussions would often be in newspapers almost immediately. It was certainly frustrating to see so much incorrect information being reported and then re-reported. 

Was misinformation an ongoing problem?

There is a lot that’s misunderstood about healthcare—the system itself and how reform will work. Unfortunately there’s not a very efficient way to correct misinformation and factual errors. That led to a fair amount of distraction on our part, trying to counteract misinformation. I had to spend a lot of time responding to critiques—some factual, some not. Unquestionably, this made it more difficult to communicate the vision for reform, benefits for Americans, and explain how the legislation will address the challenges of cost, quality, and access. 

What parts of healthcare reform do you think are most misunderstood?

People have a hard time understanding that we are able to spend less and improve quality. There are plenty of ways we can spend less, improve clinical outcomes, and have a better patient experience. We never really communicated that fact persuasively, but there’s no doubt that places like Virginia Mason, Seattle Children’s Hospital, Group Health Cooperative, and University of Washington Medical Center demonstrate repeatedly, in a sustained way, that you can deliver better quality at lower cost. In a sense, the future system in the US will look more like the health system that benefits patients in the Seattle area. 

All of your examples are Seattle institutions. Why is that? 

Seattle is really innovative in healthcare. The Seattle area is remarkable for a long history of inventing ways to improve health cost, quality, and access for patients that are copied by systems around the country. Arguably no other city in the US has as high-performing a health system as Seattle. The complication comes when trying to communicate the benefits of healthcare reform. You can’t just say, “The rest of the US will be more like Seattle,” because people won’t know what that means. Most people think that their local health system is working well for them, so telling them it’s not as good as they think is pretty tough to do. 

What are these Seattle institutions doing that others aren’t?

There are many things but two stand out. One is team-based care. In Seattle, whether you’re an asthma patient or a cancer patient, it’s not unusual to be seen by a group of doctors and non-doctors at the same time, which can help avoid complications and improve communication. For example, a cancer patient may be seen by an oncologist, surgeon, medical specialists, social worker, and nurse at the same time. That’s quite unique. After a visit, it is also common for a team of physicians to be talking to patients frequently and adjusting treatment to avoid the need for return visits or complications that can lead to ER visits and hospitalizations. 

The other thing is that there’s a big focus in Seattle around reliable operations. Many Seattle-area hospitals have pursued major efforts to redesign their operations using “lean management techniques,” based on the approaches used by Toyota but modified to work in healthcare settings. These reduce operational inefficiencies, lower cost, and reduce medical errors and complications. People all around the country visit Seattle just to see how hospitals do it. The methods are being emulated by many other systems around the country and world, but it takes years to catch up. 

Why so long?

Most healthcare is locally run and locally managed, and a hospital system might have only a couple of hospitals, so unlike virtually every other part of the economy, there are not large corporations that can use their scale to rapidly roll out the changes. Each hospital has its own management and needs to go through its own processes to understand how to improve, so the fragmented nature of the system makes change slow. 

Obama speaking with a table of people.

Robert Kocher at a meeting with President Obama. Facing the camera, from left, are Peter Orszag, Nancy-Ann Deparle, Kocher, Jason Fuhrman, Phil Schilero and President Obama. Zeke Emanuel and Gene Spearling are seen from the back

Are you satisfied with the healthcare legislation that finally made it through Congress?

Absolutely. The bill the President signed is a huge step forward, both in terms of patient protections and expanding access to high-quality healthcare. I think we put in place the policy foundation and authority needed to reduce the future rate of healthcare spending. There’s no question that many of the programs that have been put into the Medicare program to help organize healthcare—Accountable Care Organizations, Patient Centered Medical Homes, bundled payments, and incentives to reduce medical errors and hospital readmissions—will be widely copied by the private sector and lead to better patient care and experiences for patients. 

Obviously it will take longer than I would have liked to realize all these results because of the ten-year implementation timeline outlined in the bill, and because politics led to the requirement that many of the policies first be piloted before being implemented more broadly. That said, I think that 15 or 20 years from now it is highly likely that we will have delivered on the promises that were made related to cost, quality, and access. While success will require both leadership and the cooperation of the public and private sectors and ongoing refinement of the policies, I am confident that we have set in motion an implementation approach and put in place the systems and leaders necessary to make this happen. 

A lot can happen in 20 years. Could progress be derailed by changes in the administration?

Interestingly, much of what is in the plan we passed is similar to what Mitt Romney put in place in Massachusetts, and includes ideas that Bob Dole and Tom Daschle proposed as a model for bipartisan reform. I think that it is unlikely that there will be better ideas to expand access to all Americans, slow the rate of cost growth, and improve quality. Moreover, I think Americans and businesses will demand that we follow through on the cost, quality, and access promises we made since the status quo is unsustainable. If reform is delayed or derailed and healthcare costs continue growing faster than wage increases, people’s paychecks will not grow. Businesses won’t be as competitive internationally if healthcare costs for their workers keep growing faster than they can raise prices and stay competitive. So there will be a lot of private sector pressure on whoever is in charge to execute reform of the health system, and I suspect that the legislation we passed is the most appealing option politically and will be enduring. 

While you were with the Obama Administration, you also served on a federal task force on childhood obesity. Why focus on this particular issue?

The President signed an executive order to develop a national strategy to address the epidemic of childhood obesity. I was one of the people on the task force helping to lead the effort. Tackling this problem is essential since obesity is the single most important driver of our long-term healthcare spending, leading to so many costly complications including diabetes, heart disease, and some cancers. Our future demand for healthcare in large part depends on how effectively we can reduce childhood obesity since obese children often get these complications at younger ages, leading to much higher lifetime healthcare costs. In fact, if we do not successfully address obesity, nothing we do to change the economic incentives for doctors and hospitals as a result of healthcare reform is going to be sufficient to overcome the costs of treating obesity and its complications. 

We can learn from our experience with the successful campaign to reduce smoking to help inform our strategy. Our experience with smoking indicates that we will need a comprehensive set of actions that extend far beyond the health system to change our culture, and that the government can’t solve the problem alone. It will require sustained and coordinated efforts on the part of parents, community organizations, educators, foundations, the private sector, and government to be successful. 

What’s next for you?

I’m returning to McKinsey to lead a new institute, the McKinsey Center for Health Reform. We will be studying healthcare spending and cost trends to understand what effect reforms are having on cost, cost growth, and clinical quality. I’ll also advise healthcare clients on the implication of reform on their strategies and how they will need to evolve to succeed in a reformed health system.

At the same time, I’ll be a Non-Resident Senior Fellow at the Engleberg Center for Health Reform at the Brookings Institution. There I will be working to help inform with facts and influence public policy about regulation and the implementation of healthcare reform. 

What do you anticipate discussing during your talk in Kane Hall?

I plan to talk about the process of developing and implementing our healthcare reform legislation—the roller coaster and the outcome, including what people should expect to happen over the next several years. I also plan to reserve plenty of time to take questions so we can engage in a conversation. It will be fun for me to return to Seattle and learn more about the questions people have and their perspectives.