Dr. Matt Sherrer (host):Welcome into another edition of The Fresh Flow Podcast. Mitch, I was thinking this morning, as we get going this episode, we are at the time of recording here about a month out from the AACD conference. I say on this podcast repeatedly, I always learn at that meeting. It's always incredibly insightful. You've had a month to reflect of the things you heard. What were the themes or maybe what was your take-home message coming out of AACD 2026?

Dr. Mitchell Tsai (host):If you look at what's happening to healthcare systems across the country, we're all facing the same problems. And I think I sent you an article earlier before we started this podcast today in The Economist, we're facing headwinds that hospital systems have never had to face. And a plug for the AACD, the nice thing is when you're there, there's a network of people trying to figure out how to do it. Ultimately, I think all of us need to figure out where we're going to make the smart investments so that we can come out on the other side doing a little bit better than we're doing now. I think cutting expenses is just a short-term solution that's not going to yield very much gains.

Host:That's good. You said it's a lot of smart people trying to fix a lot of the same problems. I mean, good grief. That's where this podcast came from, the side conversations at AACD, the things you talk about at dinner, in the hallway, that kind of thing. I came out of it, say, with the idea in my head that I'm wrestling with the more and more AI kind of takes hold, the more and more our humanity matters even more and more. I had quite a few speakers. Mesrobian talked about it, Lynn talked about it, Peter talked about it—the irreplaceable things that we offer and where we add value, and our humanity being really the core of that. So, that's what's in my mind that's being grappled with right now. But that being said, let's move into this edition of the podcast. And we're doing something different now for the first time. We are going to the ranks of medical school, soon-to-be residency. But we're not just going to any medical student, soon-to-be an anesthesiology resident. We're going to one with, I would say, a pretty unique experience. And that's the reason we've chosen this one today, because this is something in healthcare policy that Mitch and I don't really have a lot of expertise in. So, let's go and talk to the people that have lived it and done it. So to that end, I want to welcome soon-to-be doctor, Sunjay Letchuman.

Sunjay Letchuman:Thanks so much, Matt and Mitch. It's really an honor to be here, so I'm excited to share some of my experience.

Host:Yeah. Well, thanks for coming, man. And the first question I have for you is, how in the world did a medical student, turning into an anesthesiologist, get involved in this kind of healthcare policy world where you have done a lot of work?

Sunjay Letchuman:It actually started even when I was younger in high school and college. I became obsessed with how much we spend on healthcare every year, right? Like right now, we spend over $5 trillion every year on healthcare. And I concluded that when you look at these other countries and they spend so much less per person, that if we spend $5 trillion on healthcare every single year, and we get the outcomes that we do, someone is stealing money. And I say that all the time, and I really became determined in college when I started learning more about health economics and health policy to figure out how money flowed so that I can return some of that money back into the hands of patients and taxpayers. I've sort of just been obsessed with that path ever since I got on it, and I just haven't stopped.

Host:I remembered a recent grand rounds we had here at our institution, and it was this infographic of Obama and Biden trying to fix the healthcare system. And it almost looked like something out of either the Three Stooges or Charlie Chaplin. But on a high level, what makes health policy changes so difficult to pass into law?

Sunjay Letchuman:I talk about how we spend $5 trillion on healthcare every year in our country, and everyone agrees in healthcare that we should spend less than that. No one says, "No, actually we should be spending $10 trillion." But what we don't talk about is that every single one of those $5 trillion is accounted for. Like, every dollar goes into someone's pocket, whether that's the insurer's pocket, the doctor's pocket, the hospital's pocket, the pharmaceutical company, some other middleman, the pharmacy benefit manager—every dollar is accounted for. So, the reason it's so difficult to make changes to health policy is because when you make any cut to that $5 trillion figure, that's a cut to someone's revenue. You're taking money from someone. So in Congress, what we end up doing when we cut spending is we are having to pick winners and losers. And whoever the loser is, as soon as you propose some sort of cut, that loser is going to show up to your doorstep in Congress, to tell you why that's a mistake. And that's what you have to grapple with. And that individual or that organization is a constituent of someone. And that's what makes it so difficult. So, ultimately, you know, of course, I want to reduce that $5 trillion figure, and I just want to do it in a way that ultimately reduces the burden on patients.

Host:So to that end, specifically, one thing that you've worked on particularly in the Senate is Medicare. And that's something that—I want to retire someday. I'd love to have that benefit. This is something that I can certainly relate to a little while to go. Yet when I look at your CV, I see the word insolvency. That's scary, man. So, give us some of your insights about how the sausage is made on that and where we stand.

Sunjay Letchuman:Well, Matt, first of all, you look like you're the same age as me. So, I think we have a long way to go, hopefully.

Host:I'll lean down and show you the silver in my hair. It's increasing rapidly, but thank you.

Sunjay Letchuman:But you're right, I have worked on Medicare insolvency, specifically the Medicare Part A Trust Fund. So, this is the trust fund that's funded mostly by payroll taxes, and it basically funds inpatient care for Medicare patients. It's like when you're actually hospitalized. And the scary thing is we talk about how the Medicare Hospital Insurance Trust Fund is going to become insolvent by 2033. So, what that means—insolvent doesn't mean it's going to go completely bankrupt. Insolvent means that the revenue that's coming in is going to be outpaced by the spending on care. So, that's the starting point, 2033. And I think that the reason this is happening, at least the way we are working on it in Congress, is on reducing overpayment in the program. There's two different levers that you can attack. You can either try to increase revenue—you could increase taxes—or you could decrease spending somehow. And there are some pretty crude proposals, which are, "Oh, why don't we increase the Medicare age, the age in which you qualify for Medicare so that just fewer people get this benefit." But I think that's kind of a mean solution. Because for those folks who don't even make it to Medicare age, they've been contributing their whole working life, and then they don't even get to reap any benefit at all. So, I think that's a little bit unfair. What I'm far more interested in is: Are there areas in the Medicare program that we are overspending? And how can we reduce that? So, one of the things I worked on with Senator Cassidy most recently was on overspending in Medicare Advantage. So, Medicare beneficiaries—those who are older than 65 and some other vulnerable groups—either receive their coverage through traditional Medicare or Medicare Advantage. And Medicare Advantage, for those listeners who aren't super familiar, is basically where the government contracts with private insurers to deliver Medicare benefits. The original idea of it was that Medicare doesn't control spending well, so why don't we pay private insurance companies to do this part of the government's job? And they'll do it more efficiently and reduce spending. But it hasn't really worked out that way. Unfortunately, we spend a whole lot more actually on Medicare Advantage than we do on traditional Medicare. But Medicare Advantage has grown rapidly despite our overspending. Like now, as of last year, 55% of Medicare beneficiaries are in Medicare Advantage. And how Medicare Advantage plans are paid is they're paid this fixed monthly capitated payment. So, they're paid a fixed amount to take care of a certain patient. Now, you may ask yourself, "Well, how is that amount, how is that capitated payment decided?" And a big part of it is decided on the patient's risk score. So, what that means is we say, "Okay, this patient has this condition, this condition," which makes them pretty sick. So, it's going to cost more to take care of them. So, the insurance company—the private insurance company—says, "We need $10,000 a month to take care of this patient because they have all these conditions," and the government says, "Okay." Well, the problem with that situation is it encourages these private insurance companies that run Medicare Advantage plans to make patients look really sick, right? Because the more sick they look, the higher the risk score. The higher the risk score, the higher the capitated payment. And there's a lot of evidence to suggest this. So, we basically have a situation where insurance companies will send nurses and other health staff to patients' homes and start collecting diagnoses that really don't have an impact on the patient's health or the patient's life. They sort of collect those diagnoses to increase that risk score so that they get a higher capitated payment. And that's the reason why now MedPAC, which is the Medicare Payment Advisory Commission, has estimated that we spend 120% of what we would have spent on traditional Medicare patients. Like if those Medicare Advantage patients were in traditional Medicare, we spend 120% more. So, we are overspending in this program. And what I've worked on with Senator Cassidy and his staff is how can we change some of these rules in Medicare Advantage so that insurance companies can't really play these games. Like, in our opinion, we should not allow those home health risk assessments to count towards those risk scores unless they're confirmed by a doctor. Like, you can't just go do a quick depression screening in someone's home, and then add depression to their diagnosis list unless it's confirmed by a doctor. So, those are the different pieces of legislation that Senator Cassidy is working on and I've gotten to work on with him.

Host:Correct me if I'm wrong, Sunjay—government has essentially become an employer and pays a premium to an insurance company.

Sunjay Letchuman:That's right. And it wasn't meant to be a premium. It was honestly meant to reduce spending, and it just hasn't worked out that way. And I think that every legislator—and some are and some aren't—but every legislator should confront that fact. Even those who were initially proponents of Medicare Advantage—and still proponents of it—should confront the fact that we are overspending and we are wasting money.

Host:Just this first part of this conversation makes me think of Hardin and The Tragedy of the Commons in 1968, right? And Acemoglu and Robinson—they point it out in Why Nations Fail—healthcare and education in America is viewed very differently than it is in the rest of the world, right? And in most of the rest of the world, it's viewed as a social good. It's a responsibility of the government to provide its citizens. And here, I think we have an example where healthcare is the consumer good. "How do I make a profit at the end of the day?" So, knowing that's the fundamental construct of the United States, what needs to fundamentally change if we're going to actually make a difference?

Sunjay Letchuman:It's a good question. And honestly, it's a huge question, right? And I honestly don't think we have to resolve the whole social good versus consumer good debate to fix Medicare. But what I do think we have to do to change things is be serious about how money is spent. And I think that's what we're not as serious about. In every single program, we need to be tracking dollars. Even in hospitals—both of you are part of major health systems and a lot of hospitals are struggling and they talk about how they're struggling financially. But from the outside, I think we need to say, "Well, what are you spending all that money on?" and be more critical of spending. A lot of hospitals lose money on their investments. Like, they'll have risky investments and they lose money on that. Some hospitals pay a lot of outside consultants. I mean, I'm talking millions and millions of dollars every month to consultants on things that maybe internal consultants could do instead. So, I think in every sector of healthcare, we need to ask ourselves, "Are we overspending?" And I think that's what needs to shift.

Host:So, Sunjay, we're talking politics here—it's a pretty polarized political climate here in this country. And you can certainly point to healthcare policies that are leaning towards one party or the other, and the differences. You've kind of seen the inside and, as I said earlier, how the sausage is made. When we advocate—from state, society level to nationally—which by the way, your Medicare Advantage overspending idea was a big part of our advocacy policy last year at Ledgecon—when we advocate, we try to be agnostic, neutral. I distinctly recall last year in Washington wearing a blue and red-striped tie so that I didn't appear to lean one way or the other. And then, my other tie for the other day was purple because that's the combination of blue and red. So, I say all that to say: Where is there alignment? Where is there across-the-aisle alignment on policy from what you have seen?

Sunjay Letchuman:It is a really good question. And I hate to say this, but I do think the place where there's some bipartisan agreement on who we should scrutinize more is on insurance companies. Now, Republicans and Democrats sometimes look at it slightly differently, but they both agree that we probably are spending too much money funding insurance companies rather than funding patients, or insurance companies are sort of gaming all these different systems that are hurting providers, hurting hospitals, and hurting patients. So, I think that's where there is the most agreement.

Host:I mean, I think, you know, when you talk about the insurance companies, you can also talk about vertical and horizontal integration, right? Where you have some of these insurance companies that own pharmacies. And then, they also own the pharmacy benefit managers. So, it's a giant behemoth, but it's definitely consolidated.

Host:So, we've talked a good bit about politics. And we can potentially come back to that. I want to pivot a little bit because you've also spent a good bit of your time and energy on anesthesia economics and anesthesia economic policy. You've worked with Jonathan Gal, specifically the MIPS program. Talk about the work that you guys did on how anesthesia clinicians perform in that MIPS program.

Sunjay Letchuman:Yeah. And I can give your listeners a little bit of background on what MIPS is. A lot of these policy concepts actually affect a lot of doctors, but every doctor is mostly focused on clinical work and they forget some of this other stuff that actually affects their practice. So, MIPS is the Merit-Based Incentive Payment System, and it's a Medicare program that adjusts physician payment up or down—actually up to 9%. It adjusts their Medicare payments based on basically the quality of care they provide. The whole idea that Congress was trying to do when they passed MIPS was shift payment from fee-for-service to some sort of value-based care based on quality. It's a really nice idea. It just doesn't work super well in practice, at all actually. So, there's two main ways to participate in the MIPS program. There's three, but two main ways. One is as a group. So, an anesthesia group can report their own quality measures, and they get a score of zero to 100. So, these measures could be like, "Did the patient have nausea and vomiting post-op?" Or, you know, "Did you give antibiotics within a certain amount of time before the case started?" All these different measures that are supposed to improve quality. That's one way to participate as an anesthesia group. The other is through an alternative payment model, or an APM. So, an alternative payment model is usually like a larger entity, like a health system. And they take responsibility for the cost and quality across a whole population. So if an anesthesiologist participates in MIPS through an alternative payment model, their score is based on that larger entity. So, what we did in our study—and we've actually done two studies now, one is currently under review—is we looked at how anesthesiologists are performing if they participate in a group in this program, or if they participate through an alternative payment model, and are they even able to participate in an alternative payment model? And what we found is that anesthesiologists who participate through an alternative payment model receive far higher payment adjustments—like that change in their Medicare payment is significantly higher—than it is if they participate as a group. Oftentimes, groups or individuals are actually getting payment cuts through this program.

Host:I think last season we closed with Andy Lazris, a family medicine physician. And he talked about how a lot of the quality metrics we have in medicine are just surrogate measures with really no impact on what really happens to the patient. And then, I echo back to Dr. Sessler, who commented that our biggest opportunity is still 30 days after surgery. We seem to do a really good job getting patients through the surgery. But the 30-day mortality hasn't changed in the last three decades. So, how do you construct both policy and incentives so that anesthesiologists are actually thinking about this?

Sunjay Letchuman:It is so difficult to create measures, especially in anesthesiology, that actually show you the value of the anesthesia work. What I mean by that is, in anesthesia, a lot of what you guys are doing is preventing rare complications from happening and preventing those rare complications is difficult to capture. So, that's why we end up falling back on some of these process measures—just things like temperature management or appropriate antibiotic timing. I think it's really difficult to capture the most meaningful measures in anesthesia.

Host:And to your point, you're exactly right. There's been studies, especially in primary care, that show, for example, with the MIPS system there's no evidence that performing well on these various quality measures has any relationship with the actual quality of care provided.

Host:Well, I'm the division chief for Multi-Specialty Anesthesia up here at my institution. And I have to fill out the ongoing performance evaluations for the physicians. We have antibiotic compliance, we have temperature control. But I think about Syed who wrote on Black Box Thinking. It's great that we know that we gave antibiotics 95% of the time. But what I've asked is: You want to make sure that if you didn't give antibiotics when you needed to, that they didn't get a surgical site infection. I think that's the one you want to know. And then, the one that I really want to know is: Let's say we were compliant and the patient did get a surgical site infection. From a quality improvement perspective, I think that's the opportunity to figure out what in our process needs to improve.

Sunjay Letchuman:You're exactly right. I agree.

Host:So Sunjay, then we talked a lot about value. Mitch and I talk about this as a side hall conversation at AACD and other meetings. What is our value proposition as a specialty in the world that we look at right now, with workforce shortages, with the constraints that we see, with the fact that we have some pretty good data on the economics of healthcare? I think we, probably of all specialties, bring more data to the table than anybody else. Where can we lead? Where can our specialty lead in this move to value-based healthcare? And what is our value proposition in the health system?

Sunjay Letchuman:It is such a good question. And I know that some of the other folks that you've had on the podcast are so much more experienced and knowledgeable to answer this. But I can give my two cents as someone going into the field. I think as a specialty we have to ensure that insurers and hospitals continue to value anesthesia services. And to me, that's what your question is: How do we make sure that they continue to value what you do? And I think the first thing is the specialty has to tie itself to outcomes that actually matter at a system level—complications, ICU utilization, length of stay, total cost of an episode. I think if anesthesiologists are responsible for managing perioperative risk, not just providing a technical service, it's much harder to underprice that role, if that makes sense.

Host:So Matt, the hamster got off the wheel in my head and I just actually had a thought. You know, we've been talking about clinical processes that we can improve, right? I think the broader question is: What are the nonclinical activities that anesthesiologists can do that provide value? And Sunjay, you're doing it right—you’re doing it at the policy level, the research level, the economics level. So, opportunities maybe exist outside of the clinical realm.

Sunjay Letchuman:And you're absolutely right. I think that anesthesiologists have more touchpoints in the hospital than any other specialty in the hospital. So, I agree that they are often leaders in hospital administration. The president of our hospital is an anesthesiologist; Dr. Gal, who you mentioned, is our director of revenue for the hospital. So, I agree that they have a good view. If you look at ORs—they manage ORs—and you say, "Well, ORs are very expensive to maintain. How do we reduce idle time in the OR?" Well, that's an excellent question for an anesthesiologist to lead and tackle, that has an impact on the whole system.

Host:We're going to have to change our society's name to the Association of Anesthesia Nonclinical Directors to keep up with this line of thinking. A lot of great points, Sunjay. I want to pivot a little bit. Talk about Kid Zone TV. Man, this is a hard pivot—we just chucked the steering wheel out the window with this one. But Kid Zone TV: Why did you decide to do that, to produce this kind of live, interactive show for pediatric patients? Tell us the story behind that.

Sunjay Letchuman:It is so beautiful. So, I'll start by telling the audience a little bit what Kid Zone TV is. We at Mount Sinai have a live TV studio on the first floor of our children's hospital. It's beautiful. And the show that I led, called Hands-on Science, was where I basically performed Bill Nye–type science experiments on set. It was broadcast to every hospitalized child's room. If some children were healthy enough, we actually brought them onto the show on set to do the experiment with us. But those who couldn't join us were in their rooms and could call or text into the show to ask us questions for us to answer. It was the cutest thing I ever did. And the reason I have such a big heart for pediatric patients in the hospital is because these kids didn't choose to be there. Adults often come in with years of experiences and biases, but kids are still forming that perspective. So, as a doctor you have this rare opportunity to shape their perception of healthcare as something kind and generous and in their best interest. In Congress right now and across the country, we talk a lot about distrust in healthcare, especially around vaccines. I think part of the long-term solution is to create positive experiences early on. If kids grow up feeling like their doctors are on their side, that sticks with them. That's what I try to do in my small role leading the Hands-on Science show on Kid Zone TV.

Host:Man, really cool. The more that AI and technology take hold, the more our humanity matters. That's really cool, man. Keep doing what you're doing.

Host:Sunjay, Bill Gates just called and your chair at MGB just called also—they'd like you to skip residency and start Icahn Academy for Healthcare Systems across this country.

Host:The Letchuman Academy—we just formed a business.

Host:Most of the podcasts we've asked people what they would’ve told their younger selves. We can't do that because you're younger than both of us. But we're going to go the other way this time. What do you want to tell your future self today, 5, 10, 15, 20 years down the road?

Sunjay Letchuman:It is such a good question right now. And, you know, in the past I've just had this insane drive to try to reduce overspending in healthcare, and I know we've talked a lot about that, and I don't want to lose that. Right now I'm finishing up medical school and starting residency, and I have so much of my life still ahead of me: getting married, having kids, building a family, getting a job. And I hope that in 5, 10, 15 years I don't lose the drive I've always had to put money back into the hands of patients and taxpayers. That's what I'm trying to hold true to myself, and I hope I do that.

Host:I think we should probably go ahead and start raising money for your campaign someday. I'll chip in because the future is bright. We're just about out of time. Sunjay, when I was at your level I was not thinking this far down the road. I was not thinking this advanced. I just wanted to get into residency and get a job. You are something else altogether, man. So I want to encourage you to keep doing what you're doing. I hope your drive stays just as powerful for the next few years. Residency is hard, but we need people like you to help advance our specialty. So, thank you for being on the show. Thank you for doing what you do.

Sunjay Letchuman:Thank you, Matt. Thank you, Mitch. It's really an honor for me to be here.

Host:All right. Mitchell, these things go quick, man. I look at the clock and I say, "Gosh, I thought it was five minutes in." And here we are at the end of our time. Thanks for tuning in to this episode of The Fresh Flow Podcast. We'll see you soon.