Problem to Solve

Healthcare Transformation

The impact of inefficiencies in healthcare systems is appauling, will is take to change?

America has the best healthcare system that money can buy – this is the problem. We can’t afford it. The fact that the healthcare system is so inefficient should be of great concern to all Americas. Something is wrong when $1 out of every $4 is being spent on healthcare. Medicare currently represents 9.5% of the federal budget.

New healthcare provisions require primary care physicians to administer 1,773 hours of preventative care screenings – about 7.4 hours of a physician’s working day. Matters will only worsen as growth of Medicare recipients increase over the next two decades. The world needs more doctors and PA’s that can administer healthcare. Much of the problems come down to structure, incentive practices, poor networking and inefficient work flow throughout the system.

Creating a more efficient hierarchical structure to manage where people go and how they get treated could save time and money. Focused effort on examining how to improve productivity rates and healthcare decision making is needed to determine where economies of scale and levels of efficiency can be improved. Structure of incentive practices also need to be changed to ensure flow of healthcare is efficient and designed to improve doctor and patient relationships. There should also be better ways to leverage technology to improve healthcare delivery throughout America.

One significant problem is how to transition reforms that have been skewed in favor of special interest groups. When structure, processes and decision making are influenced by special interests we create imbalances throughout the healthcare system. Ultimately, we have to improve quality of doctor - patient relationships and ability of the healthcare system to effectively support these relationships. For instance, insurance companies are hugely important to the healthcare system by imposing checks and balances needed to reduce fraud and waste. On the other hand, stringent regulations need to be in place to ensure that proper care gets deliver when it is needed. The challenge is to find balance between what is needed versus what is routinely restrict for very good reasons – makes no economic sense and there is no substantiate patient benefit.

Medicare for people in their last year of life accounts for 25% of total spending, even when this is only 5% of the population. As baby boomers who are beginning to enter Medicare reach their terminal years, end-of-life costs will blow the budget on Medicare spending. Everyone knows it is difficult and painful to let loved ones pass on, but sometimes this is just what we must do. At some point, if someone wants to use heroic measures to keep someone alive, there has to be a means to pay for it. If these costs are not covered by Medicare, insurance companies will develop supplement plans to meet market demand – this is how the private sector works. Another issue is people who are smoking or are ultra-fat. Smoking is a choice – once you have started it becomes an addition. The same often applies to people who are grossly overweight. Both are bad for your health and place a significant burden on the healthcare system.

To better understand the challenges we face, consider the time it takes to make a doctor’s appointment, the days it takes to wait to see a doctor, how long it takes to get to the doctor’s office and the time spent in the waiting room. Time is a barrier that deters patients from getting help. As physicians increasingly have to manage and allocate their time according to how they get paid, patient-doctor relationships will get strained. When demand exceeds supply, the system divides based on those who can afford care and those who can’t. The only solution is to change dynamics of the system to ensure the entire system flows more effectively based on the kind of care needed.

Placing price controls on healthcare providers and means testing healthcare consumers does not save money in the long run. It is vital to save money, but critical to implement reforms to make systems more efficient. Imposing an indirect penalty on people who have saved and invested wisely during working years is counterproductive. Good entitlement policies are a godsend for tax payers. It is dangerous to calculate healthcare when metric used to measure productivity are “highly uncertain”. The best solution is to focus on creating “wellness” solutions as an extension of employee benefits programs. The concept is to change behaviors that lead to poor health conditions. It always comes down to balance – you can’t smoke, drink and over indulge in food without consequences. Everyone needs to spend more time taking care of their bodies. The easier is for individuals to take care of themselves, the quicker we can change habits, practices and behaviors that impact health of society. Creating opportunity for people to eat healthy and exercise in work environments or during office hours need to be promoted. With the right type of incentive systems many situations can be changed.