A. Previous post | summary
Last week’s post identified potential solutions to address the US healthcare system.
B. Case study
One purpose for this series of posts on the healthcare system, was to dig in, do some homework, and evaluate if there was a nascent business opportunity.
Entrepreneurship is finding a problem and fixing a problem. I can’t think of a bigger problem in need of fixing than US healthcare; but it’s also intimidating.
In evaluating this potential business opportunity, the focus was not on revenue or profitability, but rather, delivering value as a public good or public service. For example, Wikipedia, Khan Academy, and Craigslist serve a public good, without a focus on revenue or income, per se.
I thought that there might be an opportunity to serve un-insured and under-insured citizens, by creating a search tool for cash-pay medical procedures, similar to GoodRx for pharmaceuticals, or, by creating a stop-loss insurance product, or insurance pool, for people who self-insure by not purchasing medical insurance. Medical insurance isn’t portable across states, in part, because each state has its own insurance regulatory board; and is also one of the challenges in creating a stop-loss, self-insurance product.
C. Taking action
Absent government reform, which is possible but un-likely, individuals may save money by becoming better consumers of healthcare. For example, before purchasing a prescription, check prices on GoodRx. Instead of purchasing an EpiPen, purchase a generic epinephrine auto-injector. If feeling ill, and it’s after hours, is it possible to use urgent care instead of the emergency room. Lastly, invest in health through improved diet, exercise, and other lifestyle habits.
Employers may take action by evaluating self-funded plans, rather than purchasing conventional medical insurance; making both employer and employees better informed, and better consumers of healthcare.
D. Change agents
Change agents are influencing US healthcare through the following efforts and initiatives.
- Economists: there are many well-educated, well-informed healthcare economists who study and compare data sets to understand cost trends; others may focus on behavioral economics making policy changes to “nudge” citizens towards cost-effective behavior.
- Writers: there are many effective writers, such as Rosenthal, Brill, Makary, Reinhardt, and others, who conduct extensive research to identify opportunities and solutions to improve the US healthcare system.
- GoodRx: is an effective tool for pharmaceutical comparison price shopping.
- Citizen Health: is a group of innovators with medical, technology, and economic backgrounds redesigning healthcare, whose mission is to build an affordable healthcare economy that puts people first, and is sustainable across generations.
- MDsave: makes healthcare accessible by changing the way people shop for healthcare. It partners with quality providers, and offers patients affordable rates for medical procedures. Customers pay for procedures upfront and online; prices include all procedure-related fees, with no surprise bills.
- Direct Primary Care: has grown significantly in the past decade, by developing one-on-one relationships with providers, and greater focus on outcome-based medicine.
- Telemedicine: has also grown significantly in the past decade, due to its convenience, and because of the added benefit of social distancing during the pandemic.
- Cost sharing: has grown in the past decade, due to an increase in secular, non-religious, providers, and also due to growing frustration with the Affordable Care Act, which may not be affordable for individuals that do not qualify for subsidies.
- Medical tourism: as US healthcare costs continue to grow, lower cost options outside the US are becoming more mainstream, and even encouraged by some employers and insurance companies, by paying for the patient’s travel costs.
E. Slow change
Change occurs in the US, albeit slowly; for example: women’s rights, the rights of African Americans and other minorities, recognizing LGBTQ marriage. Nevertheless, the US is the wealthiest nation in the world, measured by total GDP, and the only OECD nation without universal healthcare for all citizens.
What will motivate change, if anything, or, will change come too late. First, higher healthcare costs could precipitate change. Perhaps change will occur when healthcare spending reaches 25% of GDP (in 2050), as higher healthcare spending would likely reduce other consumption for many Americans; for example, more people having to choose between paying rent, or renewing a prescription for a chronic condition.
Second, many Americans aren’t healthy; US has the highest rate of Type II diabetes, the highest rate of obesity in the world, and also has a shorter life expectancy. Such trends likely yield higher comorbidities, requiring more even medical care and higher costs.
F. No Change
It’s possible that I won’t see healthcare change in my lifetime. First, most Americans (80%) are not dissatisfied with healthcare, and are not seeking change. This group of people includes the 50% of Americans with employer-provided medical insurance, and the 30% of retired Americans with Medicare. These Americans likely recognize that healthcare is expensive, and are likely frustrated with ever-changing co-pays, co-insurance, deductibles, and provider networks, but remain with the status quo.
Second, change is unlikely due to vested interest by organizations that could be harmed by structural change, including hospitals, insurance companies, and pharmaceutical companies; these organizations are well-funded, and have the means to lobby effectively.
Third, change is unlikely due to an increasingly divided US populace. It’s unlikely that Americans will agree on the need for healthcare change, or, agree on how to change healthcare. Fundamentally, the US has never answered the social ethics question, is universal healthcare a right of its citizens. It’s ironic that Americans have the right to keep and bear arms, but not the right for universal healthcare.
Lastly, change is unlikely due to government inaction. Germany has been pursuing universal healthcare since 1881; the US has pursued social benefits for less than one hundred years. Initiatives by the Roosevelt, Truman, Johnson, Clinton, and Obama administrations, often fell short. Universal healthcare is a frequent talking point during presidential election cycles, however, there has been limited, effective change.
G. Conclusion | key points
Intention of this case study was to unpack the US healthcare industry, better understand the issues, and propose solutions. Healthcare is a complex issue – if it was simple, it wouldn’t be an issue – and while I have developed a better understanding of the US healthcare system, my understanding is cursory at best.
The analysis has been challenging and complex, overwhelming at times; data sets are sometimes difficult to find, and not always comparable, particularly across countries.
I recognize my own bias, opinion, and preference on this topic; while I suggest that the US healthcare system has opportunity for improvement, I try do so without judgement.
Hopefully, readers have found this case study to be interesting, and better understand the US healthcare system. Please let me know if you have ideas or suggestions for further exploration, or wish to point out any errors in my analysis or conclusions, thank you.
garthmonroe 