Latest / Off the Chart: A Business of Medicine Podcast / S1 Ep124: The state of health care in 2026, with Richard Anderson, M.D., FACP, CEO of The Doctors Company and TDC Group
Transcript
- 0:00 The system by which healthcare is practiced is being, by the one hand, revolutionized, and on the other hand, being torn apart. That's a very unstable situation. The 0:20 Austin, welcome to off the chart, a business and medicine podcast featuring lively and informative conversations with health care experts, opinion leaders and practicing physicians about the challenges facing doctors and medical practices. My name is Austin Luttrell. I'm the associate editor of medical economics, and I'd like to thank you for joining us today before we get started. Just a quick note, physician's practice will be hosting its practice Academy event on March 19. The new practice management track is a virtual learning experience designed for physicians and practice administrators who want to build stronger, more efficient and more resilient practices. It focuses on practical, real world strategies that you can apply right away from optimizing operations to adapting to an evolving healthcare landscape. You can register today by clicking the link in the show notes or by going to registration DOT physicians practice.com, that said, Today, I got the chance to sit down with Dr Richard Anderson, the CEO of the doctor's company and TDC group. We talked about the organization's annual predictions report, healthcare on the horizon, predictions for us, healthcare through 2026 Dr Anderson outlined the growing role of AI in clinical care, the rise of large jury verdicts and social inflation and medical liability, the ongoing strain on hospital access and rural care, and why legal and regulatory systems are struggling to keep up. Dr Anderson, thank you for joining us to now, let's get into the episode. 1:39 Dr Anderson, thank you so much for joining me today. It's my pleasure to be with you. So you open the report by saying that long term forecasting is getting harder because of the pace of change. From your vantage point, what is the most underappreciated risk that physicians are facing in 2026 1:55 Well, actually, I think it's a very I think it's a very insightful question. I mean, the pace of change in the universe is accelerating. But if we talk about the medical universe, every aspect of it, the pace of change is changing dramatically. Consolidation is changing the way medicines practice AI has potentially very large inputs, very large potential for changing the way medicines practice. It's 100% certain that the technology with which that is integral to to the practice of medicine today and certainly integral to digital medicine, but really all medicine, and which includes AI that the legal system will not keep up with that technology. So the legal system will be completely out of step with the realities of of medical technology today, or the way medicines practice today. And there's nothing the pace of change may be it may be increasing everywhere, but not in the legal system. It'll take years of multiple separate trials on repetitive subjects to establish precedents that are widely recognized and that physicians and patients, for that matter, can recognize us understanding what the law is. All of this relates to two fundamental things, which is that we haven't we a lot of the problems in medicine in the United States, particularly, but everywhere, are based on how we finance medical care. The government pays now for more than 55% of all medical care in the United States, but that that 55% actually doesn't pay for itself. It has to be subsidized by private payers, and so private payers are paying much more for care. Having said all that, the number of insurer of Americans who have medical insurance after years of decline and to record lows still relatively high, but something like 92% of Americans had had health care insurance. That number is now starting to reverse, and we will now see more and more Americans without health without health care insurance. Finally, all of this leads to burnout, and burnout is a serious problem. Nobody wants to see doctors who are frustrated, distracted, unhappy, not able to pay attention, have competing priorities, all of those things and what we're doing next to nothing about burnout. We talk a lot about burnout, but we tend to respond to it with almost, you know, nice things, sort of the kumbaya things. Well, let's have pizza on Friday, or, you know, let's, let's meet to talk. About our issues once a month for a half hour, but that that's nice, fine, but the cause of burnout is basically the industrialization of medicine. It's about throughput, and as long as we prioritize throughput over quality of care and the doctor patient relationship, burnout is not going to get better. So it's a long answer to to all of to what is a very good question. But there, there is promise in AI that it can help with some of these things. And I perhaps we'll talk more about AI later as we go on. There is promise there. There's no doubt. There's certainly progress in the the range of disease and illness that can be effectively treated by modern medicine. Some of that progress is very dramatic, but the system by which healthcare is practiced is being, by the one hand, revolutionized, and on the other hand, being torn apart. That's a very unstable situation. 6:04 So the report says, speaking of AI that it will, it will permeate healthcare, but its value is dependent on clinician trust. From what you're seeing in claims and risk data, where does that trust most often break down? And why? 6:17 Well, it's that's a very important question, and it gets right. It goes right to the heart of what I mentioned already, you know, which is the disconnect between our legal system and the way healthcare is practiced. There are more than 1000 AI tools which have already received FDA validation. On the other hand, there are many more AI tools, than 1000 that are being used in practice in a variety of different ways. Physicians have essentially no ability to choose to understand what the no ability to thoughtfully purchase or select among the 1000s of AI potential applications, which ones are better, which ones are dangerous, which which are not dangerous, and so forth. And the AI conundrum dealing with 1000s and 1000s of these things, is a microcosm of one of the problems of American medicine, which is that there's very little actual standardization of care. We talk about the standards of care, but that's very different than saying care is standardized. Every hospital, every every doctor, has to make almost individual decisions about how AI is going to be used, and they have very little basis for doing it. Large systems, you know, have have much more ability to to create dedicated teams to evaluate AI but even there, it's very difficult. Because if you, even if you evaluate an AI tool, let's say, and it really looks great, you also very difficult to evaluate how it fits into your ecosystem of care, because there's so many potential action interactions there. The problem for physicians in terms of trust is here, there's a direct disconnect between the standard of care and AI recommendations. If AI makes a recommendation that is different than what the physician perceives as the standard of care, but it produces a better outcome or a good outcome, well then there really is no problem, because there's no damage, right? So there's no lawsuit. Everyone's happy, but if AI produces a recommendation that's different than the standard of care, and the doctor follows it, and the and the outcome is actually adverse. Well, then by definition, the doctor has violated the standard of care, and so adaptation of AI is actually going to be slowed. Clinical adaptation of AI is actually going to be slowed by this paradox, which is that using it for recommendations that are different than what your clinical judgment would suggest actually exposes you to liability, whereas when you use your clinical judgment, and your clinical judgment is to follow the standard of care. Our law says that if you follow the standard of care, if there's an adverse outcome that's not You're not liable for that adverse outcome. You follow the standard of care, all things are not perfectly treatable or treated, and so the adverse outcome is not a matter of liability. So this, this is a, this is a real conundrum, and it will end up now, I will say this eventually, AI will become the standard of care. But whether that takes, but how that's going to be piecemeal. You. It's going to be different venue to venue. It's going to be different system to system. When we talk about AI, we tend to we all say AI, we all say AI, so we know what it means, but we're actually talking about an almost an infinite system of recommendations and thoughts and data. So it's not like AI is something what it'll finally get perfected and we know exactly what it's going to do. Quite the contrary, that's part of the thing that makes AI very difficult, which is continuously learning. It's continuously morphing, hopefully for the better, but not necessarily. And when it was approved, 1000 that have already approved by the FDA. Is there any way to monitor what they're doing now, how they're being used? No. So all of this creates a very uncertain situation, but as I say, ultimately, I'm absolutely certain that incorporating AI will become the standard of care. When AI becomes a standard of care. However we get there, and that's going to be a long road, because, again, I'm referring to AI as though it's a singularity. It's not. But when we get there, then that that paradox will be resolved, because AI will be the standard of care. So follow the recommendations, and then you're practicing according to the standard. So it's a long answer to a complicated question, but it's a serious problem. It's also a great opportunity, because I'm not disparaging of ai, ai, you know, pretty remarkable, right? And and so, and we're all we say. Most of us are using it to one degree or another, and not necessarily in clinical practice, but we're using anywhere, even in my approach, in our personal lives, right? And some of the things it can do, or many of the things can do, are really quite extraordinary. So I'm certainly not suggesting that we don't use it or that it can't be a benefit, but I am saying that putting it into the infinitely complex world of healthcare organization in the United States is is a heavy lift. 12:06 So I mean building on that physicians are feeling trapped more now than ever. You know it's it's rely on AI and risk liability or ignore it and risk being seen as negligent. And I assume that would be even more prevalent as it potentially does move into the standard of care. Practically speaking, how should physicians be using AI today to both protect patients and themselves? 12:29 Yeah, but I mean, that's, it's a very good question to which there really is no simple answer. I mean, the most widely used, or at least the most widely cited example of AI, is the ambient listening in which an AI agent monitors the doctor patient interactions and the voice, the voice exchanges records those, organizes those into a coherent accounting of the doctor patient interaction and enters it into the medical record, and most of the groups and individuals that are using the more sophisticated ambient listening programs are actually quite pleased with them, because they solve, they do effectively solve the problem that physicians have that develop with the widespread adaptation of the electronic healthcare record, which is that for all its promise, physicians were ending up spending, quite literally, several hours a day, often after work, trying to enter the data that they were required to enter into the electronic health care record. Ambient listening allows most of that to be done by an automated system, and the doctor simply has to affirm that the note is accurate. On the other hand, I do point out it's a little bit unnerving to me that all of the promise of electronic health care records has certainly not been realized. Nobody wants to go back to paper records, I certainly don't suggest that. But the burden on physicians has made electronic health care records, except in the very best electronic health care records, and almost all of those are confined to large groups rather than individual, physicians. Most of the systems have made have made doctors lives more complicated, not less. And so the solution to a technical to a technological problem, Kate, created by electronic health records, is another more sophisticated technology. Well, we've been down that road before, and it would be nice if every new technology didn't require another technology to monitor it and regulate it, so so we'll see the 14:46 report also describes a trillion dollar migration to digital first care that will include extensive failures. What types of digital investments most often create unexpected legal or clinical risk once they're deployed? 14:58 Yeah, that's a great question. Question, I think, you know, in some ways, you can look at, you can look a little bit, you can look at telemedicine as kind of a parent on telemedicine, there's a human being there, obviously, in telemedicine, but the digital version of it is basically telemedicine without a human being. We have a genetic telemedicine, or we have if you're doing if you're going all the way in that direction. And there are several things. One is, we're going to have to distinguish, again, who's responsible if you have an agent, agentic, if you have an AI physician, what does that even mean an AI physician, and what are the limits of that AI physician, and how is that AI physician licensed? Right? If you're a medical practitioner and you're, if you're, if you're practicing medicine without a license, that's actually criminal. If you're a computer practicing medicine without a license, I'm assuming it's illegal, but it seems to be happening, and so I'm not quite sure how and how is it licensed. How is it regulated? By the way, if the computer messes up, who are we suing? Presumably, we'll end up as our legal system does. And this is why I say that the legal This is an example of why the legal system trails so far behind. We'll end up somehow or other, blaming the doctor, the doctor who for whom the AI was. The AI is substituting for human physician, and the human physician presumably somewhere in that loop, but behind so the physician will be so will be sued. It's also going to be much more difficult plaintiffs, lawyers and juries are very know how to sue doctors, and that we've been dealing with that for the last 50 years, and we're familiar with that system trying to sue Google or anthropic or smaller AI companies that are proliferating all over is much is getting a whole different challenge. And so again, the legal system will and some large plaintiffs firms will want to sue them, because presumably they have big dollars behind them. On the other hand, those cases will drag on in court for many, many years. And when they drag on in court for many, many years, it means a long time before resolution, a long time before precedents are established. When precedents are established in the United States, in healthcare system, they're only established in one venue, and they're subject to appeal. So this is it's a long it's going to be a long, long time before all of this shakes out. The Keith, 17:46 hey there. Keith Reynolds here and welcome to the p2 management minute in just 60 seconds, we deliver proven, real world tactics you can plug into your practice today, whether that means speeding up check in, lifting staff morale or nudging patient satisfaction north. No theory, no fluff, just the kind of guidance that fits between appointments and moves the needle before lunch. But the best ideas don't all come from our newsroom. They come from you got a clever workflow, hack an employee engagement win, or a lesson learned the hard way. I want to feature it. Shoot me an email at kreynolds, at mjh, lifesciences.com, with your topic, quick outline, or even a smartphone clip. We'll handle the rest and get your insights in front of your peers nationwide. Let's make every minute count together. Thanks for watching, and I'll see you in the next p2 management minute. 18:38 The other problem, and this is a fundamental problem. There have been dramatic advances in medicine over almost any time period in the last 125 years, if you go all the way back to the scientific basis of contemporary medicine in the early 20th century, since then, there's been basically a debt a century and a half of medical progress, but now with digital innovation, it's difficult to know what that progress looks like. It's difficult to measure it. It's difficult to know what outcomes are acceptable, what outcomes are not acceptable. And it's going to be very difficult, I think, to integrate human medicine with those, those matters, with that kind with the way medicine has been historically practiced. And so again, I keep coming back to this point, but I do think it's an important one, which is there's going to be a there's a disconnect between the rapid changes that are affecting medicine today, very rapid changes, and and the court system, which knows how to sue physicians and hospitals and established institutions. But there's very little. Precedent for suing agentic things. One example of that, by the way, is there's not much litigation against electronic healthcare records, even though electronic healthcare records have been a mixed blessing at best, but there's very little litigation against them. The litigation is basically based with on the physicians and institutions which use them. 20:26 That also talks about nuclear verdicts or plaintiff awards that are exceeding $10 million and they're becoming more common and more extreme. Can you talk about what's changed about juries, legal strategies or just society? That's the physicians may not fully appreciate just yet. 20:43 Yes, and it's in the nuclear verdicts are very, very serious problem. You know, just between in the just in the in the last two or three years, the if you take the average of the 50 largest medical malpractice judgments in the United States, the average, the 50 largest. That number has increased from a little over 30 million to more than $56, million per case. And the outlier judgments beyond that, so called thermonuclear judgments, there are now regularly, that is year over year each year there are usually there are several malpractice judgments that are more than $100 million why is that happening? For lots of reasons. One is society. The male distribution of wealth in society has created a really monetary desensitization, right? It used to be that $100,000 seem like a lot of money. Then millions seem like a lot, then billions, well, billions now we are actually very comfortable talking about trillions, either, though virtually none of us can actually comprehend what a trillion anything is, let alone a trillion dollars. And so there's a monetary desensitization that affects all of us. But in addition to that, younger juries, long younger juries have different different perceptions of what's fair and equitable. They have different they they place a different amount of faith in institutions, whether the institution, let's face in institutions, whether it's the government, whether it's whether it's physicians, even whether whether it's attorneys, whether it's retail there's just less faith in institutions because they've grown up in a world where basically one of the world of constant change and also constant legal attacks. So I think that all of those things affect the way juries approach. These, these problems that and the and the the other part of it, there's another part of this, which is, which is a cultural problem that's not generational. One is this notion very strong in the United States, but true to some degree, almost all over the world, but to very strong in the United States, which is that any adverse event that befalls us is someone's fault, and that person should be held accountable and compensate us for whatever the Damage was, and that if you don't sue that person or take action against that person, you're quote, leaving money on the table. Well, that's a very dangerous cultural attitude, particularly because ultimately what happens is we're ending up suing ourselves. As it is now, 55% of all health care in the United States is paid for by the Government. There's virtually no reason to believe that that percentage is not going to continue to go up, and as the government pays more and more and more a larger percentage of all of health care, it's literally going to be true that We're suing ourselves, and that what in the government, if the government accepts the suit of the government pays the indemnity? Well, what does that really mean? Well, it means that taxpayers, well, who are taxpayers? Well, that's that's us. So all of those things weigh in. The other thing I do want to point out about nuclear verdicts, which is that each of the verdicts is huge, and it has a potentially very large impact on an insurance company, on an institution that suffers a nuclear verdict, on all of those things. But the impact of nuclear verdicts goes far beyond the individual verdict itself, because when there's a $50 million verdict or $100 million verdict, it resets the range of value that we use that society assigns to a case. So let's just say, just as an example, let's say we're talking about the anesthetic death, a child who dies in from an anesthetic, dies from an anesthetic administered in an intestine. Just, let's just say, and there's a $50 million verdict. Well, now every case in Texas from which there's a similar kind of anesthetic death, or the range for discussion will be at least $50 million well, that changes everything. So most claims are settled for less than that. But now it resets expectations. It resets the negotiation range, and it sort of anchors the expectations of both plaintiff lawyers and, more importantly, the expedition, the expectations of plaintiffs as to what their cases should be worth or could be worth, even though the facts may be totally different. So so nuclear verdicts are a problem in and of themselves, because it's hundreds of millions, actually billions of dollars in a year total in nuclear verdicts. But the effect, like a wave, goes throughout the entire healthcare system. 25:56 Another prediction in the report warns that liability pressure and reimbursement challenges are forcing additional hospital closures and widening disparities to access or widening widening disparities in access to care. How close are we to an acute access crisis, and what does that mean for physicians that are practicing in these communities? 26:14 So I think I in a sense, we're in the middle of a rolling access crisis, right? We for years, we've had a we've had concerns about the number of Americans who lack health insurance. And when you lack health insurance, you either lack access to care, or when you get access to care and then have to pay for it out of pocket, you actually can easily, readily end up bankruptcy. In fact, we know that the most common cause of bankruptcy in most in most parts of the United States, is actually medical bills. So we've had an access to care problem for a long time, but now, as medicine consolidates and large corporations take over the distribution of many medical institutions, including hospitals and many, not all, but many venues, they choose not to. They they won't. They don't find it financially viable to operate a hospital in a rural area, or if they do find it financially viable, they will only provide certain services that are either profitable or that that that have limited liability. For example, about 60% of rural hospitals in the United States today no longer provide obstetrical care. I mean, that's an extraordinary gap, and a roughly similar percent of all hospitals in rural areas don't provide at least one other form of specialized care, and so the safety net in rural areas is becoming dangerously frayed, but it's part of a larger access to care issue that that we haven't really solved yet in the United States, 27:57 another prediction from the report states That tort reform will become a national priority if physicians and medical societies could realistically move the needle on just one or two reforms, what would you recommend? 28:09 Well, yeah, that's a, you know, that's a relatively easy question to answer, because we have now 50 years, you know, going back to micro, the medical Injury Compensation Reform Act in California in 1975 that's, that's really the granddaddy of all medical medical malpractice Tory forms, and it's really established a model for the for the country. And so we have, we have 50 years experience with legal reforms and medical malpractice. And the one thing that's abundantly clear is that the most effective single tort reform is a limit on non economic damages pain, so called pain and suffering. And the reason for that is is multiple. First of all, pain and suffering is very difficult to quantitate right what? What is grief worth? What is literally? What is pain worth? Second, as with nuclear verdicts being the most dramatic example of it, we want a medical malpractice system that's relatively fair to everybody who, who, who is involved in it. So how do we have a system in which a similar injury to a similar individual is worth 50 or $75 million in one venue and $2 million in another venue? It's it's inherently inequitable, and yet that is, that is what our what our system is, and more fundamentally, in states that have no caps on non economic damages, effectively, what we're ensuring is, and here I'm using only a little hyperbole. Is hyper. It's infinity. You can't insure infinity. You can't collect enough money from. From physicians, hospitals and so forth to accommodate verdicts of $500 million billion dollars, actually was a $900 million verdict, recent medical $900 $900 million verdict handed down by a judge. Well, not a jury, but a judge. How do you ensure that you really can't insure it so to and to the extent and we, but we all believe in that insurance is integral to to not only it's to American life, but it's actually integral to world life, right? I mean, the whole it lubricates the whole system. And so we need to protect the viability of the insurance system and so reasonable tort reform, so that one patient and one plaintiff's attorney don't take a disproportionate amount of money out of the healthcare system, because at the end of the day, healthcare is a zero sum game. The amount of money we spend on healthcare goes up, but it never comes close to covering all of the need. So if we take out $100 million for one case to to point to an injured patient or a plaintiff or an attorney, that's $100 million that's not available for that for the healthcare system in general. And so Tor reform really is necessary. You could argue even that it's a tribute to to plaintiff's attorneys, creativity in creating new courses, new causes of liability and in arguing their cases effectively the so called reptile theory of appealing to a jury's instincts about injury and pain and suffering, but it's a very destabilizing influence on the way healthcare is practiced and the way healthcare is financed. 31:52 When an AI system is acting on its own, and I know we talked about this briefly earlier, you know that's ordering tests, scheduling follow ups, adjusting medications or initiating patient outreach, and something goes wrong there. I know we don't have maybe a definitive answer just yet, but who will courts hold responsible for that, and what kind of risks does that pose for physicians? 32:13 Well, for sure, they're held they're going to hold it somewhere in this loop, there's a doctor or a hospital, and I guarantee you that they're going to be involved in the suit. It'll be much more challenging until precedents are worked out to figure out what is the responsibility of of the AI. Is the AI really practicing independently? And how can the AI practice independently if it doesn't have a license? How can the AI practice independently, if it how can the AI have a doctor patient relationship? How can the AI? What is the training for an AI that certifies that it's actually qualified to do what it says it's doing, versus a physician? What's the standard of care for an AI and and we, you know, we have this, there's a little bit of a metaphor that we look at in autonomous driving and right, who's responsible when your autonomous vehicle has an accident, and every time your autonomous vehicle has an accident, or when you when your vehicle driving automatically has an accident, it's front page news, and there's a lot of concern about it. It may be that autonomous vehicles are safer than regular drivers, and there is some evidence that in controlled circumstances that that's true, but it's not the way we look at it, because every time there's a regular automobile accident, it's not a front page case. Every time a vehicle, an autonomous vehicle, crashes in San Francisco, it's front page news. And I think it's going to be similar. It's similar with with AI and so again, eventually AI will be part of the standard of care. But how does that take place when we have hundreds, if not 1000s of AI, agentic agents of agentics, of AI systems, when we have hundreds of 1000s of places where healthcare is delivered? None of that is a seamless integration, none of that. There's no certification of AI that that that fits into our healthcare system. We mentioned that there are 1000 AI products that have been approved. That's quite different than saying that they won't have adverse outcomes, and when they do have adverse outcomes, how do we deal with that? And so again, I think that physicians are left with this paradox, which is that if to the extent that they follow AI recommendations and they're and they're correct, or there's no adverse outcome, then everybody's happy. It's really not an issue to the extent that physicians. Position chooses not to follow an AI outcome and the and the outcome is adverse. Then, then, then there's an argument that a physician will be sued for not using AI. So there's really no there's no good answer to this until society comes to grips with with the way our legal system works, and comes to grips with what it's willing to delegate to machines and machine learning, and where it insists on human judgment. And again, we talk about having an interaction, we talk about a human in the loop, but the only thing I can tell you is that to the extent that we have humans in the loop, I guarantee you the humans will be sued. We still haven't really figured out how we're going to be suing AIS and what that litigation is going to look like. 35:58 Great. Well, Dr Anderson, thank you so much again for taking the time today. Well, thank you very much. I appreciate it. 36:12 Once again. That was Dr Richard Anderson, the CEO of the doctor's company and TDC group. On behalf of the entire medical economics and physicians practice teams, I'd like to thank you for listening to the show and ask that you please subscribe so you don't miss so you don't miss the next episode, and don't forget physicians practice will be hosting a practice Academy event on March 19, featuring a new practice management track with practical, actionable education for physicians and practice administrators. You can register today by clicking the link in the show notes or by going to registration.physicianspractice.com as always, be sure to check back on Monday and Thursday mornings for the latest conversations with experts, sharing strategies, stories and solutions for your practice. You can find us by searching off the chart wherever you get your podcasts. 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