A Nashville economist looks to solve health care ills

Q&A: Larry Van Horn

Not many economists devote their careers to the health care industry, but Larry Van Horn has done just that. He’s an economics professor and the executive director of health affairs for Nashville’s Vanderbilt University, where he has worked since 2006.

He is also a co-director, along with former Sen. Bill Frist, of the Nashville Health Care Council’s Fellows program. This month, the council named its 2014 class of fellows, marking the program’s second year. The fellows will meet during eight daylong sessions taking place between January and June.

The idea is to bring people together to solve problems in the health care industry, which needs an overhaul, Van Horn said. He spoke with Tennessean reporter Shelley DuBois about the problem with publishing papers in journals that nobody reads and why simple economics could save health care.

It looks like some of your fellows come from companies with competing business models. How do you get everybody to collaborate?

At the outset of the program, we light the bridge on fire. We say, “This is the burning platform. We can’t solve this problem by trying to preserve your turf.”

This is a countrywide problem. And we are actually in the capital of health care delivery, and the solution to solving health care problems is going to be innovation around service delivery, period. So we’ve got to figure that out. And I don’t believe that it requires a full-scale blowup of the Nashville institutions. I think it’s an issue of how do we recombine the assets here to effectively succeed in the new world order.

I’ve heard that from other people – that Nashville will solve health care.

I love that mentality. That’s what it should be. We will solve this problem here. Nashville should be leading the conversation, in my opinion.

Don’t you think it is?

No. We have a lot of people in this town who have tremendous visibility in Washington. And they’re spread throughout this community, but not at the level that I would like to see.

When did you first feel comfortable representing yourself as an industry expert?

I feel like I had developed not only the academic credibility but also the industry credibility when I was recruited here to Vanderbilt. I had to have an academic record at a top research institution, and I did, and they valued that. But also, given that I was going to be directing the health care program here, I had to be viewed as a constructive partner on the side of industry, which is an additional hurdle that most academics who spend their time in the ivory tower don’t have.

Do you gain credibility by calling industry trends correctly?

Well, see, academic research isn’t about calling anything right. If you’re trying to make calls, you’re not doing hard-core research. Academic research is about advancing the understanding of the way the world works. And the currency in the world of academia is publications: publication impact and where you publish – that’s everything.

In the business school, as health economists, we’ll publish in a bunch of journals that nobody will ever read. Unless you have a Ph.D. in economics, they would make absolutely no sense to you. And they’re only read by a handful of other people.

Isn’t that a problem, especially if the papers you publish could help people in the real world?

There’s a challenge, particularly in business schools, because there is a disconnect between what industry businesses value and what academics who are working in business schools are rewarded for doing. They’re very different. And I could spend all my time writing and offering perspectives that industry might find valuable, which might have very little if any currency in the world of higher education. It’s a tough balance to strike, it really is.

What is the most innovative idea you have heard in all of the time you’ve spent thinking about revamping health care?

I hope you asked that question with low expectations because the simple fact of the matter is there’s no new idea. There’s no silver bullet, there’s no magic key. It’s just basic economics and blocking and tackling. The reality is that we have lived in a world where we have ignored the fact that we have unlimited wants and desires to either consume health care or provide it to others, but a very limited willingness to either pay for it or tax other people to pay for it.

So when you come back to first principles, it’s basically a return to producing a product or service that people value in excess of the cost. And providing it in a way that they want to separate from their own hard-earned wealth to buy it. Simple economics.