Friday, Jan. 23, 2009 | 2 a.m.
Excessive spending on medical tests is the biggest waste in the cost of health care, the former chief executive and founder of Sierra Health Services said.
Over the years, Dr. Anthony Marlon has pushed for evidence-based care, which emphasizes decisions made by doctors and managers of the insurers, applying a scientific method.
“I was the first one in town that said, ‘I will not leave that to the doctor, because I don’t trust him,’ ” he said.
When reminded that he, too, is a doctor, he replied, “I don’t care. I’m a doctor (of cardiology), and I’m subject to review like anybody else. Transparency is the word. What I do, I’ve got to defend. If I can’t defend it, I don’t do it.”
Marlon is the founder and former chief executive of Health Plan of Nevada, the Las Vegas Valley’s introduction in 1982 to a health maintenance organization. Since early last year, Marlon has worked as a consultant for UnitedHealthcare after selling Sierra Health to UnitedHealth Group for $2.4 billion. His contract is up in February.
“That was an extraordinarily novel approach ... where I asked a doctor, who was then God, to say, ‘Defend what it is you’re doing. Why are you doing all these (tests)?’ ” Marlon said. “Physicians are part scientists. You’ve got to be able to defend what it is you do, particularly when you are going to subject a patient to invasive tests or cut something out of them.”
Marlon said there is more acceptance from doctors today, but there is still resistance.
“If your doctor says you need to have a total body scan, and this organization says, ‘That’s a worthless test,’ we get a lot of flack,” he said, adding with a chuckle, “but probably a lot less flack than we did in the 1990s and 1980s.”
He said he was intent on making sure his company wasn’t approving “worthless” tests.
“We’re not going to let you have a total body scan and pay a thousand dollars to some jerk who wants to do it when it does you no (good),” Marlon said. “(But) it’s an interesting business and it’s going to be interesting going forward.”
The changing tide
Despite the recession, Marlon seems to have timed Sierra’s $2.4 billion sale to UnitedHealth Group exceptionally well.
But the doctor said his sale had more to do with the nation’s political climate than with any sort of foresight.
“In retrospect, with what’s happened to the market and everybody’s stock, it looks like I’m a genius,” Marlon said. “There’s a lot of serendipity and luck in the business. Did I foresee this recession? No.
“I did foresee a sea change in the politics and I didn’t like what I saw. There certainly is a bias on the side of a Democratic administration toward government-supported health care. As there is a bias on the Republican side toward private health care.”
Marlon calls himself a big believer in private health care.
“I’m more of a consumer of health care at my age than I’ve ever been, and God bless me, I don’t ever want the DMV setting up my appointments for health care ... The innovation that we have, the capability that we have got to preserve, and somehow we’ve got to demand the transparency from the providers.”
Marlon doesn’t put much stock in President Barack Obama’s proposed health care reform.
“Of course not. Why would you think that?” he said. “Nothing’s going to change. The change that I have seen over 30 years — there’s been change — I describe it as glacial. It moves the way a glacier recedes. Very, very slowly. Simply stated, people complain about the cost of health care, (but) this country can afford it and there is clearly not enough pain associated with it yet. Pain for paying that kind of money for the people to rise up and fix it. We could cut roughly a third of the bill by only doing the things that are necessary ... (But) as a society we won’t let that happen.
The valley’s new health plan
Over the three decades Marlon built Sierra, he developed Southwest Medical Associates and Health Plan of Nevada, which are interwoven parts of Sierra Health, Las Vegas’ largest managed health care system.
Health Plan of Nevada was the first to negotiate treatment rates in the valley.
“You have no idea what a big deal that was in the late ’70s when I went to the hospitals and told them I wanted per diem rates,” he said. “The concept of negotiating the price of health care was something I did for the first time.”
Only one hospital agreed to his terms in 1981: University Medical Center.
“I did all my business at UMC for about five years,” he said. During that time, the number of members on his plan grew from zero to 120,000. “All of a sudden, all hospitals wanted our business.”
In 2007 Marlon was the highest paid nongaming executive in Las Vegas, with total compensation of $14.5 million, according to In Business Las Vegas’ 2008 Book of Business Lists.
Today the company has 500,000 members.
And that health insurance companies put patients before profits “is an age-old adage as inane as the person mouthing it. You don’t stay in business, and build an organization as we have here, by screwing the public. That’s not the way it works. You’ve got to provide a quality product that somebody comes back and wants to buy again.”
Health Plan of Nevada offered the first insurance policies that covered preventive care when its doors opened in 1982.
“I think that is the first critical element,” he said. “We expanded the coverage base to those things that had documented efficacy. There’s a lot of stuff that passes for preventive care that really has no documented efficacy. The stuff that is typically covered in policies today has documented efficacy.”
In 1977 Marlon created Southwest Medical Associates, a group today of 250 physicians and physician extenders, as an outgrowth of his cardiology practice, Southwest Heart Associates, founded in 1974.
About 75 percent of Health Plan of Nevada members elect to visit doctors employed at Southwest Medical Associates although there aren’t any incentives to do so, UnitedHealthcare Nevada spokesman Peter O’Neill said.
The role of doctors has changed in the last 30 years, Marlon said. At the pinnacle of their profession, they abrogated their responsibility, he said.
“They did not initiate the changes, they were brought along into the 21st century kicking and screaming, looking back to the way things used to be, unfortunately,” he said. “I have a belief that medicine practiced in a thousand individual offices by individual doctors of one, two in a group is inefficient and wasteful. I had to believe that medicine practiced in a group setting is far more efficient and (has) more benefits accrued by the patient.”
A spontaneous donor
Marlon started his career at University Medical Center in the early 1970s as an invasive cardiologist, later becoming chief of the cardiology division for the nonprofit, publicly funded hospital.
“The greatest achievement of my careers, I think, has been my ability to go from one career to the next,” Marlon said. “To seize the opportunities, to recognize I can’t do it alone. I need people around me. You look around the room, you look at the number of people that have been with me 10, 20, some 30 years ... I had a lot of good help.”
Marlon was honored Dec. 11 by former employees, one of whom succeeded him as head of the company, renamed UnitedHealthcare Nevada, a subsidiary of UnitedHealth Group.
“I think United recognizes that Tony’s a unique individual,” UnitedHealthcare Nevada President John Bunker said. Bunker worked for Sierra Health for 20 years.
He said since the merger, almost all the employees remain, and the company continues on in the same fashion it did before the merger.
Bunker said the company wanted to recognize Marlon for his contribution to Las Vegas by donating $500,000 to UMC.
“He started something that will never be duplicated ... I think they felt very strongly that they recognize Tony and UMC and close the loop on his legacy. He started there, and we wanted to do something that recognized that.”
Marlon said when he learned that UnitedHealthcare was donating $500,000 to UMC, he made a spontaneous decision the Marlon Family Foundation would do the same.
So, the doctor said, while Bunker was still praising Marlon for his years of service, Marlon, his wife, Renee, and their children decided to match the donation.
“I leaned over and whispered something in her (Renee’s) ear,” Marlon said, describing the decision to match the donation. “We had a meeting of the board while he (Bunker) was talking.”
The money, to be paid over five years, is slated to fund cash-strapped UMC’s cardiology services.
Marlon said once his contract is up, he will step away for good from the company.
But he’s not necessarily finished with the health care industry for good.
“I don’t have any particular plans,” he said.
He’ll be moving to a new office outside of UnitedHealthcare to manage his foundation and possibly consult those still in the industry.
“It will be interesting to see what happens, particularly with the economic recession we’re in now,” he said.