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The Keckley Report

The Public’s Opinion of U.S. Healthcare should be Cause for Concern

By January 7, 2019March 1st, 20232 Comments

Today marks the kick-off of the 37th Annual J.P. Morgan Healthcare Conference San Francisco. It’s Woodstock for healthcare investors and organizations that need their money or have it already.

By Thursday, 465 organizations will make their case as solid investments. The life-science heavy line-up includes many of the big names, like Johnson & Johnson, Walgreens, CVS, Tenet, Pfizer, Amgen and others along with start-ups and 26 not-for-profits like Ascension, Novant, Baylor Scott and White and others. It’s speed dating for most: before and after formal presentations, agendas for presenting companies are packed with one on one meetings with key customers, trading partners, bankers, analysts and investors. After hours, the consulting firms, venture funds and a cadre of others host invitation-only social functions. And, there are plenaries along the way: this year, attendees will hear from JPM Chairman and CEO Jamie Dimon, FDA Director Scott Gottlieb and political pundits James Carvillle and Mary Matalin.

JPM’s Healthcare Conference is a big deal. Hotels charge $500-1500/night for minimum 3-night stays. Restaurant reservations are impossible and some charge patrons $100/hr. to simply hang out. It’s expensive, chaotic, and intense. Just like healthcare.

The common denominator for everyone connected to the JPM meeting is money. All need it to grow. All need it to innovate. All need it to be competitive, whether privately operated or publicly traded, large or small. To get it, they must convince lenders and investors that the opportunity is strong, regulatory risks are manageable and their business strategy and management savvy exceptional.

That healthcare is a highly regulated, capital intense, labor intense, fragmented, hyper-competitive, expensive and complicated is widely known. That’s it’s a big and growing industry is understood. That its pace of change has been slow and navigable due to regulations and the public’s aversion to change is assumed.

As an investor, entrepreneur, independent director and student of this industry, it seems to me discounting the public’s opinion about healthcare poses a major risk. It’s easy to understand why we’re prone to discount the gravity of the public’s views: our business models are primarily Business to Business (B2B). In most settings, individuals are end users with nominal influence on how business to business transactions occur. The average non-Medicare household spends only 8% of its monthly budget for healthcare. They are sensitive to their insurance premiums and out of pocket costs but oblivious to costs embedded in the B2B deals between hospitals, physicians, insurers, government agencies or how their state and federal taxes fund health programs.

Polls show that the majority think the care they receive is good, the doctors and hospitals they use competent, the drugs they use safe and effective and their costs concerning but not debilitating. Ironically, these views are unchanged for more than 20 years. Americans are generally content that the care they get is OK but worried about its affordability and access to insurance for those without coverage.

But when the public is polled about the medical system as a whole, they see things differently. Their views are fairly simplistic and consensus is widespread:

  • They think the U.S. medical system is more about its profits than purpose but are unsure about an alternative.

  • They think the government should use its muscle to make the system cheaper and better but divided about whether a Medicare for All is the answer.

  • They think healthcare is a fundamental right and everyone should have access to insurance coverage.

  • They believe drug manufacturers are guilty of price gauging and disregard the industry’s explanation that retail prices do not tell the full story.

  • They think technologies that give them more control of their health are good.

  • They believe hospital consolidation is more about leverage getting bigger and less about synergies, efficiency and patient care.

  • They think health insurers’ premiums are unnecessarily high and their profits exorbitant.

  • They trust nurses, doctors and pharmacists more than business executives and Congress and bristle at health industry profits and executive comp.

  • They believe a surprise medical bill could ruin them financially (whether insured or not).

  • And they plan to vote for candidates in 2020 who will fix healthcare to make it more accessible and affordable. Healthcare is a key issue in choosing the candidates they support.

It’s that simple.

While 30,000 are assembled in San Francisco for JPM, 100,000 are assembling in Las Vegas this week for the Consumer Electronics Show sponsored by the Consumer Technology Association (CTA). It touts itself as “the world’s gathering place for all those who thrive on the business of consumer technologies.” More than 4400 companies will show their wares including many salivating over opportunities in healthcare. Amazon, Apple, Microsoft, Intel, Google and others will be among them having staked out healthcare as fertile turf for their technology-aided Business to Consumer (B2C) healthcare. They’re keen to tap into the mood of the public for ‘something better’.

Some of the buzz at JPM will be around B2C opportunities and the public mood. Price transparency platforms, smart self-care devices, wellness programs, social determinant solutions and others reflect growing awareness across the system that public opinion matters and consumerism in healthcare is not a fad. But most of the action will be around the B2B economy that is the underpinning for the $3.5 trillion U.S. market and $7 trillion global market.

Healthcare for investors and lenders is a safe bet: global growth will exceed 4% annually in developed markets and 6% annually in emerging markets. The S&P Health Care Index has outperformed the overall market consistently and fundamentals suggest no major change in the near future. Notwithstanding uncertainty about the 116th Congress, how Judge O’Conner’s ruling invalidating the ACA plays out in the courts, or who leads HHS, CMS and the FDA. It’s safe to assume the U.S. market will likewise grow at the 5-6% pace forecast by the CBO and others. But changes in the public’s opinions about healthcare pose a significant risk that deserves attention.

The public’s opinions about healthcare are admittedly ill-informed, overly simplistic and easily provoked. Healthcare is more complicated than most understand. But the industry is to blame for mass public ignorance: we do not educate our masses effectively even in the teachable moments when they’re most receptive nor in the scheme of our formal education system wherein understanding the health system is missing.

Affordability may transition from worrisome to a cause. Lack of transparency about B2B business dealings might prompt state or federal constraints on B2B deals. Conflicts or interest, profit margins, executive compensation might prompt occupy healthcare movements. The public’s mood is so inclined.

It behooves every organization’s board and management to revisit assumptions about the risks associated with changes in the public’s view.

It behooves every investor or lender at JPM to assess an organization’s preparedness and responsiveness to adverse public attention.

Polls suggest the public’s opinions about our healthcare system should be a cause for concern.


Fact file: The Public’s Opinion about Healthcare from Recent Polls

Top Issues Government should Address in 2019: Economy (62%), Immigration (49%), Healthcare (48%) AP NORC 12/18 Poll

Opinions about the ACA (12/18): 50% favor, 40.4% oppose Real Clear Politics;

Single Payer/Medicare for All: 29% support reforming the Affordable Care Act to lower costs and make it more affordable vs. 17% who support the implementation of a Medicare For All system. Bipartisan Policy Center 7/18 60% say it is the federal government’s responsibility to make sure all Americans have health care coverage vs. 37% who say it is not unchanged from 2000 59% vs 38%; 31% support a “single payer” approach to health insurance. Pew Research Center 9/18. 52% favor a single-payer system vs. 48% who oppose. Harvard-Harris Poll 9/17

Household spending: 18% housing, 17% healthcare, 8% food, 7% transportation Moody’s Investors Service

Ethical Standards of Professions: % High or Very High: Nurses 84%, Doctors 67%, Pharmacists 64%, Journalists 38%, Business Executives 17%, Congress 8% Gallup 12/18

Affordability: biggest priorities when it comes to paying for health care for you and your family? Making sure that you and your family have health insurance coverage 36% Lowering out-of-pocket costs (co-payments and deductibles) 29% Lowering health insurance premiums, 9% Limiting government involvement in your health care 8% Other (please specify): 42 2% Don’t know/No opinion 7% Bipartisan Policy Center 7/18

Concern about Insurance Premiums: “Of four potential financial setbacks related to health insurance, having to pay higher premiums or copays ranks as the biggest concern among U.S. adults, with 61% saying it is a “major concern.” Close to half (46%) worry this much about not having enough money to pay for healthcare, while 42% say being denied health insurance for a pre-existing condition or otherwise having to go without health insurance are major concerns” Gallup 12/18

Confidence in Administration’s Efforts to Lower Prescription Drug Costs:38% confident vs. 62% not confident Survey Monkey 11/18

Confidence in the Medical System: 38% have a great deal/quite a lot in 2018) vs. 80% in 1975 Gallup

Overall Mood: “Shifts in these mood perceptions have occurred during the year, most notably a 10-point drop in the past month — from 57% in November to 47% today — in the percentage of Americans who believe the economy is getting better. Nearly as many, 45%, now think it is getting worse, marking the first time since April that less than a majority has felt optimistic about the economy. Americans’ broad satisfaction with the direction of the country has slipped seven points since October when the percentage satisfied had returned to the year’s highest level of 38%, previously recorded in June. The current 31% feeling satisfied is back on par with January’s 29%. From a long-term perspective, Americans’ economic perceptions remain much more positive than they were during the 2007-2009 recession and multi-year recovery period that followed. Their current level of satisfaction with the direction of the country is high compared with levels seen during that period, but significantly lower than earlier years.”  Gallup 12/18

Ratings of Quality, Cost, Access 2000-2018: Gallup 12/18

Gallup table black.PNG


  • Rob Tholemeier says:

    Some this is sadly amusing.

    First, anyone that thinks Medicare for All ™ is free healthcare has never signed up for Medicare. Seriously not free.

    Second, people that thing the pathway to affordable healthcare is lower drug prices needs a wake up call. Rx Drugs are only about 10% of healthcare spending and without them (Rx Drugs) we would be paying a heck of a lot more for healthcare. Even at current prices they are a relative bargain,

    Third, the only way to make healthcare less expensive is to reduce the expense of delivering care. I’d start with ending CMS price fixing and make providers to compete on price.

  • Omari says:

    Loovely blog you have here