DMS alumnus gives his alma mater $2 million toward scholarships
It all started with Dr. Norman Payson scratching his head and thinking, "What's going on? This is crazy." As a young family physician in a California hospital in the 1970s, Payson noticed major pitfalls in the way healthcare payments were made. At the time, most insurance companies did not cover outpatient care—so people who were not very sick were often admitted to the hospital for routine procedures. If unnecessary hospitalizations could be avoided, he reasoned, "you could that much more afford to pay for immunizations, prenatal care, for medications, which normally were not covered by insurance plans."
Economic model: This was the "basic economic model" of early health maintenance organizations (HMOs), he explains.
Gradually, Payson, who is a 1973 graduate of DMS, became more involved with the delivery of health care and less directly involved with patients. One hospital committee led to another, family priorities led to a move to New Hampshire, and, in 1985, Payson founded Healthsource in Concord, N.H.
Quickly: The HMO grew quickly, spreading throughout New Hampshire and into Maine and the Carolinas. By 1989, Healthsource was generating revenues in excess of $40 million. And in 1997, it was sold to Cigna for $2.2 billion.
Payson says that he learned the business of HMOs by happenstance, but he'd like to help formalize that process for future DMS graduates. So he's donated $2 million to the Medical School to do just that. "Dartmouth took care of me," says Payson, who grew up in New Jersey as the son of a welder and attended DMS on scholarship. "I owe Dartmouth everything for my education."
Payson's gift will be divided equally: half will provide scholarships for New Hampshire students to attend DMS and half will sponsor a select group of DMS students who wish to pursue an M.B.A. at Dartmouth's Tuck School of Business, in addition to their medical degree. "It's very expensive to go to med school and to go to business school, and to do both is really a hardship," he says.
By helping to train physicians in business, Payson hopes to bridge the "disconnect between what really happens in the marketplace, how health care is delivered, how it's financed, and medical science."
Marketplace: He explains further: "They're different fields really. So physicians don't necessarily understand, nor should they understand, the marketing of health insurance, or what goes on in the marketplace, or what are the economics of drug development, or how hospital economics work. It's not their field to understand that. But Tuck students, on the other hand, are well groomed in business and they understand markets, finance, and business, but obviously they don't have the healthcare background."
Payson attributes his own success in building Healthsource —and later saving New Yorkbased Oxford Health Plans from financial collapse—to his knowledge of both medicine and business, as well as to his professors at DMS. "I got a truly healthy sense of skepticism . . . about how health care is delivered," he says. He was introduced to the ideas "that our medical records are run amuck; that there's no communication between physicians; . . . that one should be more skeptical about how health care is delivered; that we can do better—provide better care [that is ] more affordable, more responsive to patients." These are among the concepts that later became embodied in Dartmouth's Center for the Evaluative Clinical Sciences (CECS).
Dartmouth now has the opportunity "to be a model for how health care can be delivered better. And the glue is CECS, because CECS is such a national leader in studying variation of practice patterns and outcomes," says Payson, who has served on the DMS Board of Overseers since 2001. He also teaches health-care finance to Tuck and CECS students and is part of a workgroup—led by Dr. Paul Batalden at CECS—that is focused on reducing costs within the health-care system.
Formalize: Ultimately, Payson hopes that his gift will help to train some of the future leaders of the health-care marketplace. "Who's going to be the CEOs of the big pharmaceutical companies?" he asks. "Who's going to run the big biotech companies? Who's going to help run the insurers of the world and all the rest? We should train some of those people, rather than people just randomly learning and doing it. That's good, too," he adds, "but it's good to really formalize the educational pathway."
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