[00:00] Bryan Hyde: Welcome to the Health Policy Podcast. I'm Brian Hyde, and today I'm joined by Dr. Dean Waldman, Professor Emeritus of Pediatrics, Pathology, and Decision Science, also former director of the Center for Healthcare Policy at Texas Public Policy Foundation. He has— he's been the founding director of the New Mexico Health Insurance Exchange and is the author of the award-winning book, Become an Empowered Patient. And that sounds like a very rich history, Dr. Dean. Welcome to the program. Would you mind taking just a moment to tell us a little bit about who you are, as well as what you do? [00:32] Dr. Deane Waldman: Sure. I was, for a long time, a very, in one sense, happy and very other sense, unhappy pediatric cardiologist for 40 years. I loved kids. They seemed to like me. We did really marvelous things taking care of babies with holes in their hearts or blood vessels that were blocked and things of that nature. And so the work was wonderful and successful the vast majority of the time. So in that sense, I was a very happy doctor. I was a very unhappy doctor because all the time I had to fight the system that you would think— you work for a company, that's your employer. You would think that your employer would help you do your job because that's why you're employed. Well, The system made it hard for us doctors, nurses, medical, mental health therapists, whatever. It makes it hard for us to actually do what we're supposed to do. And so that was very frustrating to me, which is what eventually drove me to get my MBA at the age of 55, believe it or not. Thinking, okay, well, it's my problem. I don't know how to use the system, so I will get the management tools and financial understanding and so forth. Well, I did that, and it's still—I still couldn't make the system patient-focused. So then I began studying the patient—the the system—and here's the key: I began to look at the system. Just the way I looked at a patient, which is well, I'm not going to just treat the symptoms. The the patient's got a headache or the patient's got a stomach diarrhea, whatever. Why? What's the cause of the patient's illness? So I said to myself, okay, why is healthcare not working for the patients and not working? For the doctors, the nurses, those of us who are supposed to provide care. That's my very long story to show you how I came to be where I am now. [02:54] Bryan Hyde: And we have you on this program today, the Health Policy Podcast, to talk about healthcare cost and healthcare spending. And I guess I wanna start with the question is, how have consumers lost control over healthcare spending? [03:09] Dr. Deane Waldman: That's— thank you for actually going right to the key question. Why is it that consumers whose money is being spent on their behalf don't control that money that is being spent? Because it's their money. All right. The answer is 2 things. One, it started with a prepayment system, which, believe it or not, actually started here in Texas. in Dallas, Texas with a well-meaning, right at the, well, Great Depression. Long story I won't bore you with, but the bottom line was prepayment and a third-party structure started here. When you add, and here's the key, when you add the Second World War, Second World War, we declared war. December 7th, well, right after December 7th. In January and February of 1942, they declared the government, quite rightly so, wartime economy. They created wage and price freezes so that they could control the economy and make the whole industrial system work as efficiently as possible, giving up our freedoms Okay, consumer freedoms, namely control of our own money. Okay, fine. That was necessary during wartime. At the end of the war, all those wage and price freezes were repealed except one. The one that remained was the ability of an employer, tax-free, to pay for your insurance. Now, the thing is, that's your wages that the employer is taking and giving to the insurance company. So now fast forward to 2026. The average American worker last year, 84 million Americans, had $27,000 of their wages went to an insurance company. So that's a very long-winded answer to say to your question, how did we lose control when the employers have the advantage of taking our wages before we get 'em and sending 'em to insurance company and let the insurance company say, oh, well, we're gonna spend it on your behalf. Right. So, okay, our simple solution, first major solution, repeal the employer-sponsored— a nice misnomer— employer-sponsored health benefit and give those wages, last year $26,993 average, to 84 million Americans and let them decide how to spend their healthcare dollars and they will control their spending. And watch what happens to prices. Watch what happens to service in terms of, instead of 4 months when the patient is paying the doctor directly, you're not gonna wait 4 months for your appointment. It's gonna be next day or the day after. Why? 'Cause if the doctor doesn't deliver that service, you ain't going to him. Or her. [06:43] Bryan Hyde: And actually, this, this raises another question, and that is, you know, look, obviously that's a lot of money coming out of the patient's pocket, but how is this affecting doctors? Why are the best doctors stepping away from medicine? [06:55] Dr. Deane Waldman: Okay, 2 reasons, but the dominant reason is what I call the psychic reward. The reason we all, most of us, went into medicine It was for what Maslow, if you're into psychology, called the highest of human needs, which is self-actualization. Well, for us, I call it the psychic reward. I get a baby, the baby has cyanotic heart disease, is going to die in the next 6 months. We do what we need to do. We operate, we give medications, whatever we do, and the patient gets better. Okay. Now, I may get paid, I may not get paid, diddly squat. I got rewarded because I feel that I have done something wonderful with my life. You could say the same thing about nurses and other doctors and therapists, which is we get up in the morning because we feel good about ourselves because we help people, and that makes me feel good about me. That's my psychic reward. Okay. Well, when the government, A, devalues you by taking your charge and paying you 10 or 20% of your charge, B, much more important, when the government says this, or the insurance company says, no, you can't give the patient that drug, you have to give this drug, which happens to be cheaper, but I know the right drug is not that drug. So we get taken away from that, positive connection with the patient because the government, or well, let's just say third parties, tell us what we can and cannot do. That's the reason. Then you add this regulatory burden. I mean, the number of forms that I have to fill out for every single patient I see, and I could give you a long list, but it'll make you nauseous, so I won't. You throw all that, and it's like instead of helping us, do what we— God's work or noble work, whatever you want to call it. They actually make it as hard as possible to do our work. [09:05] Bryan Hyde: Wow. Well, I'm starting to understand why you wrote the book Becoming an Empowered Patient. Talk to me about the future of Medicaid and Medicare. [09:16] Dr. Deane Waldman: The original Medicaid law, let's see, it's— last time I looked, it was '77. Million Americans were on Medicaid. Okay, well, the fact is the intention of the original law was for medically, for disabled, for survivors, and I forget the third category, but basically the original law in 1965 was for medically vulnerable people who basically without government would die. without government support for their healthcare. They estimated, and the data showed initially, that that was roughly 2% of the population. To be exact, it was 1.8% was what their calculation says. So we'll call it 2%. Well, last year, 24% of our entire nation is on government support, which means taxpayer-funded support. They're not all medically needy. They don't all have chronic lung disease or kidney failure or things of this nature. Most of them are healthy, able-bodied Americans, and they shouldn't be on Medicaid. So there's that. Now you add the fact that the original law, and this is really important, has Section 1801. Section 1801 of the original Medicaid law says And I quote, the federal government is prohibited from interfering in a state program. They're not supposed to tell you what eligibility is, what benefits, what payment structure. The state should do that. The government simply gives a certain amount of money to the state, and the state then takes care of its medically needy 'Cause the state knows better than the federal government how to handle their patients. It's very different if you live in Rhode Island where there are 3 major medical centers within a 45-minute drive, or you live in Montana where there's no trauma center less than 8 hours' drive away. Hello? Well, excuse me, you shouldn't have the same structure for your healthcare system in Montana as you do in Rhode Island. But that's— and by the way, those 2 states have the exact same number of people, but one's got 5,000 physicians and the other one's got 1,000 physicians. Well, you gotta structure things differently. Bottom line is Medicaid should be run by the states and without the federal interference. You put those 2 things together, And suddenly you will have a more efficient system for those who really need it. And those who really shouldn't be on Medicaid can be on their, quote, employer-supported, except for the minor detail that they should be getting their wages in the first place anyway. [12:22] Bryan Hyde: Wow. You know, when you talked about, you know, taxpayer funding, you know, moving those programs along, it makes me think about the Affordable Care Act and about— I've heard people say we're steadily moving in the direction of single payer, you know, healthcare or health coverage. And yet that single payer isn't the patient, though, is it? [12:45] Dr. Deane Waldman: Yeah, I just finished an article which I haven't sent in yet about price controls. And this is an answer to your question. Just bear with me for a second. And that is, I say price controls, yes, but the controller should be the patient. Not so. Do I believe in single payer? Absolutely. I believe in single payer. The single payer should be the patient. Now, you talked about affordability. Let's talk about money for a second here, which is last year the United States spent— to start again, spent just over $5 trillion on our healthcare system. Of that, less than half provided any medical care. It went to government bureaucracy, regulations, enforcement, compliance directives, all that mandate for the— you brought up the Affordable Care Act. The Affordable Care Act. cost the United States taxpayers $1.76 trillion, repeat, trillion dollars. Most of that went to the infrastructure. How do I know that? You mentioned earlier at the beginning of this program that I was on the New Mexico Insurance Exchange that was created by the Affordable Care Act. The government at the time, Susana Martinez, put me on that board. She said, you're going to have fun dealing with the, with the, the crazies who want to spend our money. And anyway, so I know the Affordable Care Act infrastructure because I was part of it. That's where most of that $1.76 trillion went to the infrastructure, just the way every They passed Trump and some things he do and some things he does are really questionable. Price fixing. It started with Biden in the Inflation Reduction Act, but then he added price fixing and price transparency. Okay. Price transparency. You think, well, all it takes is, you know, the hospital has to publish a list of their prices? Well, no. There's a whole series of rules and regulations that have to be written. They have to be passed through the Federal Register, and then it goes to an agency, and the agency has to set up guidelines and has to set up overseers. And you start adding up, and suddenly you're talking about several billion dollars, probably hundreds of billions for Just a list of prices, which by the way are irrelevant because that's not what actually the doctor gets paid. That's the charges. And charges and payments are very different. My average charge for doing a cardiac cath in a critically ill newborn baby range between as low as maybe $1,500 and as much as, I don't know, maybe $9,000 if I had to insert a device, a stent, use a special balloon, whatever. Okay. Medicaid paid me the maximum allowable reimbursement. You ready? $387. [16:22] Bryan Hyde: How generous. [16:25] Dr. Deane Waldman: Yeah. Well, so the question is, but the system put up my $1,500. Where did that money go? Answer: rules, regulations, directives, mandates, enforcement, compliance, review, all these things that you don't need if the patient is connected directly to the doctor. You don't need the third party checking up. Which brings me, actually, you wanna talk money? I don't know if you've paid attention to this whole fraud thing that went on in Minnesota, is going on. We're talking about— Hundreds of billions of Medicaid money, which makes me crazy because then I think about, well, think of all the services that those medically needy patients aren't getting because these people have stolen hundreds of billions of dollars. Now stop for a second and think about this. What if the patient had control? What if that mother with an autistic child who wants to have counseling and have help for her child, if she had control of her Medicaid money and she contracted with, you know, I'm sure you didn't pay attention to the congressional hearings, but Ms. Larson, who was a And she founded 4 autism counseling centers in Minnesota. When the fraud came out and the federal government basically stopped all Medicaid funding for Minnesota Medicaid because they didn't know how much was being stolen, she, a legitimate Medicaid provider, literally had to stop providing care, which means that the children weren't getting the care or the children weren't getting the food. So again, what if the patient actually had control, in this case the mother, but the patient had control of the money? You can't, there'd be no third party to steal it. [18:45] Bryan Hyde: It sounds like you have made, I think, the most solid case I've heard for putting the patients back in the driver's seat. One final question for you, Dr. Dean, and that is for people who want to really sink their teeth into this topic, where would you direct them? Do you have a website, or is there an organization you can point them toward? [19:04] Dr. Deane Waldman: The answer is yes. The— we have a website called empowerpatients.info. It's not a commercial operation, that's why it's not .com, it's .info. But the main thing is to read that book, Become An empowered patient, which by the way is also available in Spanish. Se un paciente empoderado. I I want people to talk to each other about these issues, these thoughts, the the myths that exist in healthcare that are just plain wrong, that are getting in the way of our actually fixing the system. Read that book. It's a really easy to read book. The readers, the reviewers have really loved the thing. Anyway, the point is, help yourself by becoming empowered. And that's why we call it Become an Empowered Patient. I'm not going to do it for you. Brian's not going to do it for you. The government sure as hell is not going to do it for you. But you can do it for yourself. Read the book and you'll know how. [20:11] Bryan Hyde: Again, we've been talking with Dr. Dean Waldman. Thank you once again for joining us here on the Health Policy Podcast. [20:18] Dr. Deane Waldman: Thank you.