Crisis of Empowerment


My recent re-reading of Believe in People: Bottom-Up Solutions in a Top-Down World by Charles Koch (which I highly recommend, by the way) got me thinking about empowerment in the context of the healthcare system.

First, an aside: I use the term “healthcare system” very generally. I just mean the sum total of everything that’s part of how we finance and deliver health care. I don’t mean that it actually is a well-functioning system and I do not mean to imply that it should be a system or that we should focus on making it more systematic. In fact, I think the oft-heard comment that health care is “fragmented” is misguided because it implies “fragmentation” is bad. We don’t decry how fragmented food production and delivery or any other part of our economy is. If anything, we think of healthcare too much in terms of a “system” and this thinking sends us down the wrong path looking for solutions.


We are stuck in an expensive, complicated, unsustainable system in which quality is uneven at best and pretty much everyone is poorly served. We are stuck in the sense that despite healthcare being on the top of everyone’s list for regulatory and legislative changes for decades, and despite numerous reforms and initiatives, we can’t seem to figure out how to improve things overall. We keep spending more, we keep working on the same problems, we even spend a great deal of time and money and energy fixing problems that were created by the last round of reforms! Bob Murphy goes through several examples of this in the book, The Primal Prescription: Surviving the “Sick Care” Sinkhole. All of this leads me to think that our approach is deeply flawed, perhaps due to faulty underlying assumptions. But I digress. Today we’re talking about empowerment.


Maybe we are stuck because we are disempowered, and because we’re disempowered we look to others to fix the healthcare system. Maybe the fix is not something that legislators or bureaucrats can effect. Ok, not maybe. CERTAINLY. I am very skeptical that they can fix what ails our healthcare system because they’ve been trying for at least 8 decades. If they could improve it, don’t you think they would have improved it by now? Yet spending just keeps increasing; people are less and less satisfied with their care and how much they are spending for what they’re getting. We continue to decry the actions of big, entrenched players like insurance companies, health plans, pharmaceutical companies and hospital systems, yet none of our efforts seem to rein them in or hold them accountable. Businesses, families, state and federal government budgets are more and more strained due to healthcare costs. Physicians and other healthcare providers are more and more burned out and disenfranchised every year. Healthcare is in crisis. Perhaps it is a crisis of empowerment.

Another aside: You might say there have been improvements. Ok, maybe there are some populations who are now better off than they were before. You could make that argument about the Affordable Care Act. Yes, more people are covered now than before. Those people are probably better off if they are now able to receive needed care that they were unable to receive before. But we should not judge the ACA or any other change solely by whether anyone benefited. We must look at how everyone fared under the change, both in the short term and the long term. Yes, many people were eligible for expanded Medicaid coverage with the ACA. However, lots of people who were happy with their coverage and care became uninsured when ACA was implemented; ACA said their coverage wasn’t good enough and people who could not afford or did not want more expensive, more comprehensive coverage became uninsured. These people are not better off after the implementation of the ACA. And what about impact to taxpayers? Subsidies have been increased considerably since the early years of the ACA and the burden to taxpayers and other economic effects should certainly be part of the calculus of whether we are better off or not. Greg Fann’s content (such as here and here) at Descant and elsewhere is a great place to find more details about the inner workings and results of the ACA.


The policy tools available to legislators and bureaucrats are top-down one-size-fits-all tools such as rules and mandates. A recent example is the requirement, which went into effect January 1, 2021, that hospitals disclose standard prices for a few hundred procedures. It sounds like a good idea. I like price transparency. I want customers to be able to find out how much something will cost before committing to buy it. How has this worked out so far? First, a coalition of hospital groups sued to block the Trump administration from enforcing the President’s 2019 executive order; they lost. At first, many hospitals were not disclosing any prices at all, and much of the information that was disclosed was impossible for consumers and even healthcare data geeks to figure out. Last week, a study revealed that less than half of hospitals complied with the requirement in the first five months. Whether this shabby result is due to complexity of payment information or hospitals being willfully non-compliant or something else, it would be difficult to argue that it is working. A cynic might say that this hospital price transparency fiasco shows that even the force of legislation and bureaucracy cannot hold the big, entrenched healthcare players like hospitals accountable.


Rather than try to prove or disprove the cynic, what if we look to remedy the lack of transparent hospital prices with bottom up action rather than top down action? I recently had a surgical procedure to address an issue I was having. Because I wanted to drive all of the decisions and observe how all interactions with the hospital went, I sought out the price myself. My health share encourages this, and was very supportive throughout everything, from diagnosis, to treatment planning, and reimbursement to me. It was straightforward to get a self-pay, all–inclusive price for the surgery, and the price seemed reasonable (I compared it to the price on the Surgery Center of Oklahoma’s website). My health share agreed that the price was reasonable, so we were set. It seemed to me that the hospital was used to dealing with uninsured and other cash paying patients, as they had a reasonable price at the ready and they made sure I knew how much lower this price was than their usual charge for the procedure. Of course, not every cash paying patient has this sort of experience at every hospital. But in my experience and that of others I’ve talked to, physicians, hospitals and other providers of medical services want to get paid, they want to facilitate payment so they can take care of you. I suspect that providers are willing to accept a payment that at first glance seems much lower than their usual fee because there’s so much less hassle and paperwork dealing directly with the patient. And they get paid what the patient agrees to pay; there’s no insurance company that runs the claim through an indecipherable maze of logic to arrive at a payment to the provider that’s a fraction of what the provider expected. The point of the story is that bottom up action WORKS. Where the President of the US, with the aid of bureaucratic behemoths, has been unable to get hospitals to consistently disclose prices patients can use, I was easily able to get a good price for my surgery. Of course, bottom up solutions require lots of people to be acting from the bottom up, requiring change from the entities they interact with. But bottom up action works. Top down action does not seem to work very well in healthcare.


My hospital pricing example is just one patient’s experience with one tiny piece of the healthcare system for one particular procedure. What could empowerment look like more broadly in the healthcare system? Many of the blog posts and podcast episodes at Descant can be characterized as being about empowerment. The solutions that I favor, such as Direct Primary Care (see interviews here, here, here and here ), non-network surgery centers like the Surgery Center of Oklahoma, and health shares like Sedera, are about thinking differently and delivering or financing superior care at a much lower cost. They do this by avoiding the big, entrenched, unaccountable players in the healthcare system – the big insurance companies, the big health plans, the bureaucracy. They do this by empowering YOU; you - the patient, you - the employer, you - the physician. My focus on paying for primary care (part 1 is here), which is mostly about comparing the costs of paying for primary care directly and paying with insurance can also be seen as being about empowerment. Not only is it empowering to spend so much less for primary care by paying directly, it’s empowering to not have an insurance company butting into the doctor-patient relationship and decision-making about routine care. Direct payment returns the power and control to the patient and physician.


What about physician empowerment? I have often told the story of the first time I went to the DPC Summit nearly a decade ago. I was starting to learn about the model and I was intrigued because of how much sense DPC makes from an actuarial standpoint. The patient pays for primary care directly - insurance is not used for primary care. In actuary-speak, routine care is not an insurable risk and it’s not a good idea to use insurance to pay for such things. I thought I’d drop in on their little DPC conference as it was here in Kansas City. I was absolutely blown away by what I found there. Doctors were SO EXCITED, SO HAPPY to be practicing this way. They were like little kids on Christmas morning. Certainly, empowerment is a big part of what they were so excited about. They now were able to spend their time taking care of patients, serving the patient’s needs as they envisioned when they decided to become a doctor. The frustrations with practice in the traditional system, the ways it stripped them of their autonomy and prevented them from taking the best possible care of patients had almost completely vanished.


The initiatives in Mr. Koch’s book Believe in People share a common thread. They are bottom-up solutions in which people are empowered to fix a problem. Where top-down management left huge problems, bottom-up solutions saved the day. His examples run the gamut from battling addiction and gang violence, to removing anti-competitive regulatory barriers for hair braiding businesses, to empowering young people to explore their interests and believe in themselves with young entrepreneur programs and restaurants that hire and mentor youth from juvenile detention centers. The principles of empowerment and bottom-up solutions hold promise for being just as powerful for fixing injustices in healthcare as they’ve proven to hold in those other areas.


I’ll be emphasizing empowerment and bottom-up solutions in my Descant content going forward. I hope you’ll join me on this fascinating and important journey.

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