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Why “Market - Driven” Needs to Be Brought Back into The Conversation

Updated: Feb 11, 2021

In 2007, Regina Herzlinger sounded the clarion call for healthcare reform with the release of her 3rd best seller, "Who Killed Health Care? America's $2 Trillion Medical Problem - And the Consumer Driven Cure." Of all the literary and scholarly research Gayle and I have devoured over the past few years, this book definitively captures what’s at odds in a system so broken that it now devours nearly 18% of our nation’s gross domestic product. We also think Regina is onto something by way of a cure to what ails us, and it has free market writ large across it’s table of contents. Her message is still relevant and perhaps even more so given the fallout of yet more failed policies. Without meaning to come off trite it's ultimately about power in the hands of the consumer. More precisely the patient and physician. "The American people must win this battle," Regina pleads, "A system controlled by insurance companies or hospitals or government will kill us financially and medically - it will ruin our economy, deny us the health care services we need, and undermine …research that can fundamentally improve the practice of medicine and control its costs," (pg. 1).

You'll note the timeliness of Regina's 2007 release, as public distrust and pessimism with the U.S. Healthcare system undoubtedly ushered in reform under ACA. Reform, no doubt, dressed up to appease the masses, but also lined with big interests that often compete with the everyone's hope for more affordable, accessible care. And don’t get me wrong, the system was in dire need of repair. Consider this, in 1992 only a small portion of the total deficit in the U.S. was attributed to healthcare – roughly $16B out of $224B according to preliminary data by the Concerned Actuaries Group. By 2008 healthcare expenditures were accountable for 50% of the national debt and by 2017, 100% of the debt load was attributed to healthcare spend. One hundred percent! How is this sustainable and how do we not talk about “cost” (a dirty word among many public health aficionados) when entertaining solutions?

ACA is arguably another attempt at a failed model. Yet a quick google search on the topic of ACA will always underscore how many are insured. It’s akin to focusing on how many Americans have or have had COVID -19 without asking about the overall mortality rate (and that is, unfortunately, a questionable statistic). Gayle and I often lament over the passage of ACA. We each recall where we were at when it passed – much like many of us recall our exact whereabouts on 9 -11 or the Challenger disaster of 1986. I was in the middle of the Caribbean on a stinky cruise liner eating powdered eggs. My gut told me one thing – adverse selection is going to fuel a disastrous premium surge, but the media will likely only focus on the number of insured and not actual care delivery and other potentially detrimental effects that were never even considered. How could anyone consider effects without actually reading and discussing what should have remained proposed legislation? The biggest letdown for me though, centered around the fact that free-market solutions were never going to get the spotlight they deserved – companies like Compass Professional Health Services, who ushered in a means for price transparency in the healthcare transaction – saving untold millions of dollars for self-insured plans. How many more entrepreneurial approaches to our healthcare woes never saw the light of day?

It's as if we have been left with a coat of many colors - a dizzying patchwork of top down directives that Gayle and I hope to show only lead to less care, more cost and endless bureaucracy. Unlike the endearing lyrics of Dolly Parton's song, this, at first glance is an analogy that has left many of us out in the cold. A closer look however - underscores how to best tackle "all of the elements" if you will. It rightly conjures up a system so complex that the cure must be from a bottom-up approach. Complex systems and the endless tributaries they create are best thread together with the same care and precision that goes into making a coat of many colors and a bottom-up approach is the couture face of healthcare reform.

The impetus for Gayle and I to dialogue on health care reform - especially given the cacophony of opinions, papers and books on this topic, is a desire to simplify the fix. And in undertaking this venture, we have listened and read many supporting and contrary views. No matter how far afield we may be in our opinion on a cure, every voice matters.

While we can't address every aspect of care, and there are many, we felt it critical to start somewhere. As I am authoring this post, I have encountered the most inane nonsense related to prior authorizations and specimen procurement. The later pertaining to molecular diagnostics in oncology and worthy of its own blog. Nonetheless, both issues are hallmarks of bureaucracy designed to roadblock care under the veneer of protecting patient interests. And BTW, the administrative state in healthcare has metastasized to a point beyond comprehension. We need less bureaucracy - not more. Even the word itself is hard to spell – bah humbug. Ok – I’m being feisty. But I have so many stories from the trenches that even the staunchest advocates of Bernie Care should pause.

So - as we venture forth – just a warning. Gayle and I primarily suggest that insurance needs to be preserved for insurable risk. Period. This is where the cure begins and why Gayle is such a big proponent of Direct Primary Care. Arguably, DPC is the best example of the American public winning the battle and I’m sure Regina Herzlinger would agree. But healthcare is so complex you say! We agree – which is why we will argue for a need to get back to basic actuarial principles that have stood the test of time. We will bring front and center “cost” and tax-payer burden back into the conversation along with entrepreneurial solutions that are addressing problems head-on. We recognize that skyrocketing premiums, out of pocket costs and general dissatisfaction have many of us leaning more toward Medicare as the solution for us all. Maybe. Maybe not.

We must be courageous enough to ask is “this or that” the most beneficial for our society as a whole given a certain set of trade-offs. What one focuses on in healthcare debate is critical and we look forward to many spirited conversations.

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