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The Scales of Life and Death, Profit and Loss
Q & A on the Business of Health


Besides designating him an SAS alumnus, the alphabet soup following the name of Mitchell Blutt, C’78, M’82, WG’87, identifies him as a Penn Med doctor and a Wharton MBA. Who better to tell us a thing or two about the business side of medicine? Blutt is an executive partner at the NYC private equity firm JP Morgan Partners. A venture capitalist, he no longer sees patients, although he is an adjunct faculty member at Cornell medical school. He sits on the board of the Michael J. Fox Foundation for Parkinson’s Research and is an SAS overseer and Penn trustee.

Q. How did you come to study both medicine and business?
A.
After medical school, I entered a residency program at Cornell’s New York Hospital, where there was a professor of infectious disease conducting clinical trials for a new antibiotic. He told us that any resident who identified a patient that fit the enrollment criteria would receive a bottle of wine. That was an exciting prospect at that point in my career. At the time I believed medical science was advanced by the physician-scientist tinkering in a lab, which was the career path I aspired to. I was reading about the pharmaceutical industry and talking to people, and I began to realize that in most cases a study for a new drug comes from the pharmaceutical industry. These giant businesses spend billions of dollars trying to find the next compound that will have clinical efficacy and be a successful product. I began to understand that a huge force shaping medicine was what Arnold Relman, the former editor of the New England Journal of Medicine, called the industrial-medical complex. I decided that if I were to have an impact on this profession and this industry, I would have to understand the business side of health care.

Q. Do you think for-profit health care is the best way to serve patients?
A
. I wouldn’t say it’s the best way, but there’s no reason why it can’t be as good, if not better, than any other way. Even not-for-profit health care systems have to survive or thrive financially.

Q. Can medicine be both humanitarian and profit-making?
A.
I think clinical care needs to come first always, but one can practice good medicine with cost effectiveness in mind. There’s some interesting literature on the difference between the individual patient and the statistical patient. You might ask, Why wouldn’t we do an MRI scan every year on every American? Wouldn’t we pick up an occasional tumor and be able to cure it? The answer is: We would, but it would be unaffordable. The yield—the number of tests that show a positive finding and result in successful treatment—would be incredibly low for the billions of dollars in additional spending. Just doing all tests and giving all treatments to all patients all the time is not in the patient’s interest. Putting someone on an antibiotic because they ask for it every time they have a runny nose is not just a waste of money—it’s dangerous.

Q. Would you say that the physician serves the individual patient and the HMO serves the statistical patient?
A.
I would say the government reimbursement sources are trying to serve the statistical patient. The HMO, if it’s for-profit, is trying to serve its shareholders. And that’s fine as long as the HMO doesn’t neglect quality of care. There are lots of anecdotal reports in the press, but I don’t know that it’s been demonstrated that HMOs have caused neglect of patients.

Q. What do you believe are the critical issues facing the health care industry?
A
. There was a letter in the New England Journal of Medicine about 20 years ago. It had a title something like “Schizophrenia of the American Public Regarding Health Care.” They were using schizophrenia in its lay meaning, the idea being that Americans want unlimited health care, but they’re not willing to have tax increases to pay for it. That continues to be the biggest challenge: How do you provide the best and most health care of any country in the world and at the same time make it affordable? Affordable not just to individuals but to corporations and the government. Eventually, I think, Americans will have to make more choices about where they spend their dollars—for health care or otherwise.

 

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