Healthcare: Money vs. Quality

American medicine is about to undergo a revolution.  No, not the Affordable Care Act, cuts in Medicare, malpractice reform, or tens of millions of baby boomers needing treatment. I mean real, permanent and disruptive upheaval.  We are going to transform the only thing that really counts in this capitalistic society of ours.  We are going to change the money.

For 10,000 years, the patient paid his medical costs. If you lived in Greece in 850 BC, Spain in 1490 AD or the United States of America in 1920, each person reimbursed the doctor for his or her service.  Whether the currency was denarii, peseta, dollars or chickens, reimbursing the healer was a personal responsibility.  Since technology was inexpensive and true expertise was limited, this near barter system worked well through the eons.

In the middle part of the twentieth century, this changed.  The scientific model applied to healthcare brought a logarithmically increasing complexity to medicine. There was so much more we could do. There was so much to teach and learn.  It was much more expensive.

By the 1960s, it was obvious that healthcare costs of were financially wiping out entire families.   An extraordinary solution was reached.  We would all pool our money and spend from a common account in our time of need.  Health insurance was born.  Because old or poor Americans did not have extra cash to fund insurance trusts, we got together as citizens of a benevolent nation and put money away for the needy.  Thus, Medicare and Medicaid came to be.

Insurance, whether private or government, was a brilliant solution.  Health care bills did not wipe out families.  Medically and financially needy individuals were served.  Middle class families, struggling to raise children and achieve “the American Dream” were not saddled with medical bills incurred of their parents.  A significant measure of personal and societal security was achieved.

The problem was that when workers, employers, venture capitalists and Washington all invested in health care, an immense pot of capital was born.  Millions, billions, and now trillions of dollars begged to be spent on medical treatment, innovation and construction.  This was not to be resisted.  For the 40 years, our entire society has been on a frenzy to spend this money.

Everyone has chased this “infinite” tower of gold.  Doctors, hospitals, pharmaceutical companies, medical device manufactures, equipment salesman, contractors, consultants, lawyers, researchers, charities, investors and even patients themselves have competed, expanded and spent without regard to the impact on society.  We have practically bankrupted a nation through healthcare overspending.

Incredibly, the net result has not always been the finest medical care in the world. We live shorter then any Western Society.  Our infant mortality rate is high.  There are wild extremes between have and have-nots. Moreover, we out eat, under exercise and out shoot any other “first world” nation.  Only recently did we relinquish the title of most smoker deaths.

Thus, we enter a new era in which we will not compete for diminishing dollars.  We must compete for quality and value.  The starting place for all healthcare decisions must be that the care provided is the most likely to help, will have the least side effects and will be affordable.

The time of tests without proven value must end.   Multiple drugs, which do the same thing at increasing cost, cannot be acceptable.  We cannot build unneeded hospitals, at astronomical cost. Doctors will have to prove quality, efficiency and value. We must be aware of the net benefit to each patient and to our society.

Soon, doctors will not be paid not per test, but per disease.  In a “case-rate” environment if a physician is treating a patient with Stage I breast cancer he will not bill for each test, visit and drug. The doctor will send only one bill.  The cost to treat Stage I breast cancer.   He will have to show data to prove his patients are getting research guided, objective, value based medical care and most importantly, the doctor will need to prove his patients are doing well.

This is an opportunity for doctors and patients to gain control of healthcare decisions and planning.  Doctors understand medical data and care.  They are ideally suited to determine the treatments most likely to bring value.  They are powerful medical care advocates.  Patients understand their personal and medical needs.  They can set their own priorities and goals.   Together the natural patient-physician team will form the core relationship in seeking and achieving value based medicine.

Most industries found long ago that by focusing on quality, better results are achieved at less cost.  In the dollar-based competition of the last 40 years, this lesson has been lost in healthcare.  However, by turning to this most basic concept, that the most best is often cheaper, we can save American healthcare.

The Kinsey report estimates that of the 2.7 trillion dollars spent last year in the United States on medical care, $600 billion was excessive.   What remarkable things could this nation achieve, not only with these dollars, but with simultaneously better medical care?  A healthier, richer nation.  By focusing on the basics of quality and value, we can find a vibrant tomorrow.  We dare not turn from this task.  The future of our America depends on it.


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