AMERICA 2.0! Healthcare

MODERNIZING HEALTHCARE – Mr. President’s Prescription?

Is social healthcare all about providing insurance for 50 plus million American people with no coverage? Is this a mechanism to marginalize the compensation for this high stress high skill precision services industry? Or a way to remove redundancy in a complex mostly underwritten yet very regulated insurance driven industry? Or is it about new means of Healthcare Delivery which brings responsibility to a very complex service driven yet thankless industry at the same time bringing capitalistic innovation for a new and cost effective healthcare to all human beings- bringing services to where it is needed and when it is needed without compromising quality, capability or compensation for the services. It certainly looks like one of those too good to believe strategy.
Healthcare Delivery need not be about reducing patient care or money to every provider in the health care system.

Looking at how the current day participants - patient, doctor, employer, hospitals, governments - state and central, medical device manufacturers and pharmaceutical companies and insurance providers could change to act responsibly without giving up on free market principles – sheds light on the efficiency a change could bring to this industry.In the current setup If a person is insured either through eligible employment or through dependency coverage or through other state or government programs - most likely the following scenario happens.From dental to vision to any doctor’s or hospital visit the concern is not about what the cure is or the cost of service is - it is more about what the out of pocket expenses are. From a providers perspective it is more about what the individual’s eligibility is and not about what the best available service is.

PHARMACEUTICALS:

Statins- 40B in revenue and growing and there is no reason for them to lower the cost for several years. Avastin - has the ability to extend the end of life by a few months in conjunction with other expensive cancer treatments for a total cost of 50K. Every person eventually gets into a lifestyle drug to address some form of age related degeneration or lifestyle induced ailment. As the cost of administering is paid by a third party - insurance which in turn is either provided by the employer or the government in most of the cases( 90% of total healthcare expenses for an individual is towards the last 6 months of life & most of the people at that stage is covered by government policies) - it is very easy to adjust to a cocktail of pills every day without adjusting or making an attempt for a change in lifestyle.
This relieves the individuals from the responsibility of putting pressure for a cure. This kind of lifestyle encourages the pharmaceuticals to create lipitors and avastins which does not attempt to cure the disease but provide life enhancing mechanisms by curing symptoms and incremental solutions. It is the equivalent of Software As A Service- Drugs As A Service?? Imagine having a Tylenol for fixing blood-pressure or diabetes or cholesterol – or on the other end imagine taking a daily pill for the rest of the life for a head ache?
The incentive should be to find medicines to cure ailments and not to address symptoms on an incremental basis- making lifestyle addiction, both physically and psychologically, to a basket of pills.

EQUIPMENT MANUFACTURERS

The next element is equipments and tools that are used in hospitals from MRI to EKGs. Every manufacturing industry from automobiles to semiconductors the common theme is increased capabilities and price compression- in medical GEs and siemens of the world have failed in its responsibility in using the same fundamentals like every other industry - if high tech principle is used today an million plus MRI equipment will be a portable device which will be given away for a couple of bucks.
By keeping costs high it limits the applicability of the device. If you take Intuitive Surgical’s Davinci robotics tool which is million plus - in addition to providing cost effective alternate procedures using minimally invasive operations - it actually increases the odds of survival by a huge factor. The cost makes it very difficult for all hospitals and clinics to afford it and also keeps the skills needed at artificially high levels. By expanding the reach of such equipments and devices we can increase the demand and also provide an inexpensive solution – which will reduce the overall hospital care cost.

HOSPITALS & CLINICS

Either by design or by carefully planned public policies – the states and cities are drawn out to have sparsely populated communities extending to the wide corners of the country- excluding a few major cities. This kind of development makes it economically impossible to have a total healthcare package available in every city and neighborhood. The latest in medical innovation is available to densely populated communities – making it either expensive or untimely to offer services in most of the smaller cities. By adopting a combination of connected clinics with sophisticated tele-medicine we can provide most of the latest development in every corner irrespective of the market size- this will enable the prices of newer innovations to come down dramatically and also have more and more companies entering the market as this will actually address the total population irrespective of the size of individual communities.
Looking at a Wal-Mart’s clinic where most of the day to day medical requirements are available by Telemedicine - it is not just the cost that is important –
- Where it is available
- What it takes to provide services
-increase the productivity of specialist and reach of the specialists to every corner without need for size of area or market
- by easy access to clinics with little cycle time most of the ailments can be detected at a very early stage thus reducing cost both from a productivity standpoint and also from a healthcare point of view.

CORPRATE ADVANTAGES

Moving cost away from the company's structure brings reality to actual pay scale for every position in the company. As the insurance premium is based on average age, size of organization and overall health habits of the employees and their families - the average cost becomes a base wage for every position irrespective of the competitive position of the company's product or service offering. This also gives undue advantage for large companies over smaller rivals as smaller companies end up either paying more or offering less choices to its employees. This movement of cost away from the company enables organizations to focus on products and services and attract talent and contain their costs competitively. From an employee’s perspective - they are able to pick and choose their jobs based on their interest and capability. This indirectly reduces discrimination on prospective candidates based on the individual’s health history. In the long run it pushes the responsibility on the individual which brings more awareness and responsibility to develop healthy habits and eventually bring down cost of patient care. This gives more flexibility for companies to provide different ways to educate and provide a healthy environment for the employees.

INDIVIDUAL & CORPORATE CONTRIBUTIONS

Once the organizations are relieved of the cost overhangs from the insurance subsidies – they have lot of leverage and flexibility to offer better and healthier environment to bring awareness about healthy lifestyles and better medical practices amongst its employees.

Recently Cisco dedicated a huge building for health and exercise with a resident doctor and a full service clinic. At the outset it looks like a PR ploy by the HR Dept. Digging deeper we can see how it can change lifestyle and cost behavior.By offering such a service it enables the employees to use it at the earliest symptoms of any ailments.

This reduces the healthcare costs in several ways-

1- reduces the number of sickness related absenteeism
2- reduces spreading to fellow employees
3- reduces the cure cost as it is found early
4- also reduces the insurance premiums


INSURANCE

Looking at insurance- every person carries insurance from the moment they are conceived. Most of the healthy persons do not start developing any ailments till in their 50s. With a job no issue as the company picks it up. Let us say no job- insurance is impossible to get as the person falls in the high risk category. Now what ever happened to the 50 plus years of low risk period during which the individual carried insurance? Even car insurance offers good driver credit and no accident reduction - doesn't it make sense that if an individual carried a good health for 50 plus years should get something in return?

TECHNOLOGY

As technology is evolving at a rapid clip – from wireless to collaborative innovations – it is very easy to find ways to offer very sophisticated healthcare system that will bring responsibility and accountability to every level of the healthcare supply chain – enabling lowered/affordable yet uncompromising services to everyone without commoditizing and marginalizing the service providers. On an average for every 10 minutes of patient time spent by a doctor 20 plus minutes is spent on non-patient time. BY bringing innovative processes and technology this ratio can be adjusted favorably helping both the patient cost and increasing the productivity of the doctors – without compromising the quality of service or the compensation structure.

GOVERNMENT AGENCIES

Acting as a responsible regulator the government can ensure free market forces to provide a healthy yet capitalistic and creative services driven healthcare. By being a pioneer in implementing a broad base health system this will expand the American corporate global market share significantly as they will innovate and deliver more cost effective yet revolutionary products and services which will be sought after globally. This would bring back market leadership to most of the companies which have been losing market share to either low cost generics or to low cost manufacturing bases.

By bringing new innovation and bring responsibility to every participant of the healthcare system – it will also reduce the cost of insurance both for patient care and malpractice alike.