Steve Calvin M.D. on pregnancy care, health care reform, and innovation

What is the Product?

By some accounts nearly a trillion dollars of healthcare spending is wasted in the US every year.  As an observer of the system since starting medical school 38 years ago I am convinced that those numbers are accurate.  Inefficient and unnecessary medical care is a massive fiscal boulder dragging down the US economy.  Stagnant or declining incomes of the middle class and an unsustainable social safety net are direct consequences.  


Though many of the players in the system agree about the magnitude and seriousness of the situation their fingers all point away from themselves. Government, insurers, hospitals, health systems, and physicians look everywhere but in the mirror.  So much of this expensive mess is due to distorting subsidies, burdensome regulation, and a lack of price transparency that make healthcare the least competitive segment of the US economy. That is about to change.


It is going to change when we decide what products we actually want from the healthcare system. Until now the system has told us what products are available and what they will cost. William Sage is a physician, attorney, and academic at the University of Texas.  He has written a great article in Health Affairs that argues that we will never get anywhere until we define the products that we want and then make providers compete on quality, satisfaction, and cost.  His article can be accessed at:


The concept of defining the product relates directly to our maternity and newborn care reform efforts here in Minnesota.  What is the product that mothers want in pregnancy care?  Is it a disorganized and expensive string of visits, ultrasounds, labs, and fetal tests followed by a medicalized birth experience?  The current system insists on selling sketchy components as their product and they do so because that is how they get paid.


In the current fee for service system the focus is on billing and coding to maximize each provider’s share of the pregnancy care financial pie.  The focus will shift when the product is a single price comprehensive maternity and newborn care package delivered by a motivated team of providers and facilities.  That is where our BirthBundleTM comes in.  We are founded on a foundation of midwife-led birth centers, backed up by collaborative obstetricians, a great cloud-based health IT platform in athenahealth, and forward thinking hospitals – all organized by the Natal Network Inc.


Progress has been slow but this real life product is now within sight. We provide it through the virtual (and we believe virtuous) network described above.  By the end of the year we will pilot the BirthBundleTM with a commercial insurer and a public program insurer here in Minnesota.  The clinical, patient engagement, and cost outcomes of the pilot will be studied by colleagues at the University of Minnesota School of Public Health.  I anticipate that we will break (not just bend) the cost curve while serving satisfied and engaged mothers with the excellent care that they deserve.  Stay tuned.

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