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magazine home > archives > summer 2004 > features

Dr. Cyril Chang takes the pulse of health care in America by eyeing the divide between business and services.

The Healthy Economist
by Jamie Peters

Cyril Chang
Dr. Cyril Chang, this year's Eminient Faculty Award winner.

Six mornings a week, Dr. Cyril Chang glides through a fitness center's swimming pool in Germantown as a prelude to the day's workload. The exercise routine comprises a cycle of methodical movements - arm strokes and kicks slice the water's surface to propel the body forward; the lungs take deep breaths, holding them until they are greeted by fresh oxygen. Chang's physical exertion is not only a literal product, but also a reminder of his primary research as an economist, plunging through the dense surfaces of numbers into what lies at the heart of his work: good health.

Chang, a professor of economics at the University of Memphis, has built a career analyzing health-care issues by placing them under an economic lens. Somewhere along the way, his examination of health-care providers' business models began to deeply affect the way he lived his own life. As a young adult, Chang kept in decent physical shape through regular exercise. But 15 years ago - after slacking off for a period of time - Chang began swimming. He credits his work for jumpstarting the effort. "Personally, it has made me a lot more health-conscious than I otherwise would have been," Chang says.

Breathing life into numbers

On land, few things come as natural as breathing, which occurs primarily as an unconscious action. Swimming alerts one to the acts of inhaling and exhaling, demanding a person to significantly alter his or her breathing patterns. As the body forges a path through the resistant waters it must learn to synchronize the movements of the arms, legs and head to adjust to a foreign rhythm. The persistence that fills the spaces between breaths is what matters the most.

Chang brings the same combination of discipline and rigor to his work as a professor, researcher and consultant for the health-care industry. "He can discern the complexity of issues," says Gene Cashman, president and CEO of grant-making outfit LHS Inc. "And the resolutions of those (issues) are both noteworthy and trusted." Cashman, who also is a member of the U of M's Board of Visitors, has worked with Chang for more than 20 years, including engaging the professor as a consultant when he was CEO at Le Bonheur Children's Medical Center. He says Chang's sense of integrity and compassion in recognizing the people behind the business issues give his analytical skills an emotional resonance. "His character enables him to speak on matters of principle. Doing the right thing," Cashman says.

The knotty business of health care has presented Chang with a number of opportunities to apply economic concepts in an aim to address and solve problems. After all, as Chang says, "Economics is sterile unless it is dealt with in a real-world context." The winner of the 2004 Board of Visitors Eminent Faculty Award at the University of Memphis, Chang also is the director of the Methodist Le Bonheur Center for Healthcare Economics, which is located at the U of M's Fogelman College of Business and Economics. The center was established with a $1 million gift from LHS in 2003. Chang, who has been a professor at the U of M since 1981, is leading the partnership's mission of optimizing the efficiency of government medical programs and examining the impact of regional and state trends in health care.

Tackling TennCare

One object Chang continues to view through the various angles of the economic prism is TennCare, the managed health-care program that enrolls about 1.3 million poor and disabled Tennesseans and has been plagued by skyrocketing costs. Earlier this year, Tennessee Gov. Phil Bredesen constructed a plan to overhaul the program by limiting certain benefits and instituting co-payments. The changes received approval from the state Senate in May and were expected to be reviewed by the Centers for Medicare and Medicaid Services, a federal agency overseeing TennCare, in July. If the plan receives federal approval, it could save TennCare $2.4 billion from January 2005 to 2008.

"Fundamentally (Bredesen) has to deal with a very, very difficult, if not impossible, job," says Chang, who has written articles on the subject for publications as diverse as Journal of the American Medical Association and The Commercial Appeal. Bredesen faces the challenges of satisfying "three fundamentally incompatible goals of health-care reform" that the public demands, Chang says. Those things include the best quality of services, expanding access to services for everyone and affordable care, according to Chang. "The trouble is, is it is exceedingly difficult, if not impossible, to do all three at the same time. Something must give," Chang says.

As Bredesen works to save the TennCare system before its out-of-control costs start to cannibalize the state budget for other programs, Chang continues to conduct a number of research projects involving the hotbed of issues surrounding the program.

One question Chang is exploring: Why do TennCare enrollees use so many prescription drugs? While the national average is about 10 prescriptions per year for each person, the state of Tennessee has an average of 11.5 prescriptions and TennCare participants tally about 30 prescriptions annually, Chang says.

"Tennessee is leading the nation in terms of per-capita utilization of prescription drugs," Chang says. "Tennessee is not a rich state . . . that can afford that kind of health care."

A related question is whether the benefits derived from the prescription drugs justify the steep financial investments in them. "Are we getting our money's worth? In other words, has it been worthwhile?" Chang asks. He proposes that perhaps this much money spent on drugs may not be due to bad management but because there is actually a significant need for the drugs. Moreover, perhaps the resources poured into the drug prescriptions could be helping reduce the amount of money spent on other health services, Chang says. "So the high levels of utilization of prescription drugs by itself is not necessarily a problem," he adds. "It becomes a problem if the extra money spent is not giving you the extra benefits."

Chang also is looking for reasons why the level of per-capita spending of health-care dollars varies from region to region to determine whether there is an association between the quality of health care and the amount spent. "Does higher spending imply higher quality of health care?" Chang asks. He points out that a recent national study "suggests higher spending implies lower quality, not higher."

Cost-benefit analysis of a carpool dad

As varied and ambitious as his projects are, Chang has guided his career to avoid a zero-sum game scenario, so that his home life has not been neglected while his work life has thrived. After receiving his master's in economics in 1972 at then Memphis State University and his Ph.D in economics at the University of Virginia, Chang began teaching the subject to students. In between classes and research Chang found time for car pool duties when his daughter, Cindy, and son, Andrew, were attending primary school. "He always kept a good work and home balance," says Andrew, now an MBA candidate at UCLA. The Chang household was a busy one. Chang's wife, Alice, worked at FedEx at the time as a business analyst, which she recently retired from. In between grading his student's papers, Chang would assist Andrew and Cindy with their school projects. Even to this day, Chang still helps edit the school projects of Cindy, 24, and Andrew, 29. Now it's just at the master's level (Cindy is pursuing a graduate degree through Northwestern University's integrated marketing communications program).


While pursuing his master's in economics at then-named Memphis State University in the early 1970s, Chang met his wife Alice. Although both grew up in Taiwan, they didn't meet until they were living on the other side of the world in Memphis. "We fell in love with the University, this charming city on the river and, most importantly with each other," said Chang during his acceptance speech for the Board of Visitors 2004 Eminent Faculty Award.

Closing a gap

At the same time, Chang continues to set aside a block of time each weekend to work on his own projects. One of his ongoing efforts involves the problematic gap that often exists between the health-care providers' business models and public health models. Chang is honing in on challenges facing TennCare Partners, the mental health and substance abuse component of the program.

His research data over the past few years has given tangible proof to assumptions that had been mainly anecdotal in nature, says Don Voth, executive director of the Memphis and Shelby County Mental Health Summit, an organization aimed at strengthening the mental health and substance abuse system in the community. "I really value his insight and his ability to ask the right questions," Voth says. "He's very respected within our community here."

Chang's research points out that in west Tennessee and Shelby County the majority of TennCare Partners enrollees are African-Americans who "traditionally - rightly or wrongly - have a distrust of the medical establishment on mental health matters," Chang says. As a result, the clients may be more reluctant to use the program's services. The extra money from the underutilized resources of the program ends up being used by other parts of the state.

The challenge is to find a way to better connect critically mentally ill individuals with the program. "What you need is a well-oiled, well-connected, integrated mental health system that can help those who cannot fend for themselves and let them into the system," Chang says.

The summit has appealed to Tennessee Department of Mental Health and Development Disabilities for more equitable distribution, and it continues to meet with government officials to improve the existing disparity, Voth says. The next step would be access to additional money to invest in pilot projects aimed at connecting clients more effectively with TennCare Partners, according to Voth.

"The struggle is ongoing," Chang says.

In fact, Chang mentions that he has a meeting later in the day related to the effort of bringing this issue to the attention of the state government. This underscores Cashman's comment on Chang: "His resolve is not just to report on the data, it's actually to see the reform through."

A carefully planned approach, persistence and patience are key. Kind of like swimming in choppy waters. Chang already has the breathing part down. Now, it's just a question of unknown distance, of an indefinite length of time.


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