Taming the Healthcare Cost Beast


February 14, 2018

Hello and welcome. I'm Dr George Lundberg and this is At Large at Medscape.

Except for a 3-year period in the 1990s brought about by strict health maintenance organization (HMO) practices, healthcare cost inflation in America has increased at two to three times the rate of overall inflation for as long as I have followed it (the 1970s), driving the overall percentage of the GNP [attributed to healthcare] ever upward, now around 17%.[1]

The key reason is that healthcare around the world is primarily about health, while healthcare in the United States is primarily about money—money-driven medicine.

Do we, the general public, "get what we pay for"? No way. Our healthcare value, outcomes, and satisfaction lag far behind those of most other much less expensive systems.

Why is that? It's complicated, but it's mostly because such a large percentage of the people and companies working in healthcare like the money and have developed ways to manipulate a money-grabbing system, always upwards. The profit motive is at every level. Thirty percent of all diagnostic and therapeutic services are unnecessary, etc, etc.

So, when three of the most dedicated and successful American capitalist company leaders propose to take profit out of healthcare, at this time for their own employees, the stock market shudders. What the hell is going on?

Might Amazon's Jeff Bezos, Berkshire Hathaway's Warren Buffett, and JPMorgan Chase's Jamie Dimon (ABJ) actually be serious about leading American healthcare into a potentially broad-scale, not-for-profit enterprise? Why would they do that?

Out-of-control healthcare cost inflation takes money out of the pockets of everyone not in the healthcare industry. Oh, I get it.

By starving the healthcare sector cost beast, there will be much more money for all other industries. No altruism here—just business competition.

For a long time, healthcare economist Brian Klepper has argued that the people paying the bills for healthcare insurance, writ large, namely most American Big Business, has the group buying power to pressure lower overall costs. Sadly, they have mostly not used their power. Brian also works on developing high-performance health systems.

What this means is the transparent offering of medical practice that actually works and not medical practices that are primarily used to generate profits.

Although I have worked in the healthcare industry all my life, I have seen no other force so far (short of government) strong enough to tame the healthcare cost beast.

I hope the ABJ internal model succeeds. It could then grow, even universally.

Add this initiative to the power of informed healthcare consumers acting out Elisabeth Rosenthal's proposals to demand financial explanations, transparency, and fairness. And then we, the American public, may finally have a chance to tame the healthcare cost beast.

That's my opinion. I'm Dr George Lundberg and this is At Large at Medscape.

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