What is wrong with our healthcare system…
…and what you can do about it.
What is wrong with our healthcare system?
The use of health insurance to pay for just about everything, numerous corporate players who are insulated from true market forces and the government distorting the market we end up with numerous problems. Here are just a few:
1) Misaligned incentive structure - This is probably the most the important category of the 3 and causes the most harm. The incentives in healthcare are really working against quality patient care. For example, recommending or performing the more expensive intervention (i.e. surgery or admission to the hospital) is often financially rewarded - it is reimbursed at a higher rate. Another area where the incentive structure is poor is in the office setting. The traditional model rewards high volume, not necessarily better outcome. To be fair there are numerous federal government programs that are trying to reward better quality when it comes to Medicare (i.e. ACO REACH), but I am skeptical of their long term impact and sustainability. Lastly, the ACA with its’s 80/20 rule insurance companies are incentivized to increase total healthcare expenditures every year. Read more here.
2) Lack of transparency - Transparency is lacking in so many areas of healthcare. For example, it is almost never clear what the price of anything is in healthcare. What is the cost of an MRI or a colonoscopy or Tylenol in the hospital? Well, it depends on what your insurance has negotiated with whomever is providing the service or product and it can vary drastically even within the same institution. In fact many people actually choose not to seek care due to lack of price transparency. Additionally, most have no idea who is really involved in deciding what care they can or will receive. It is true that your physician plays a big role in this, however, there is also your physician’s employer and your insurance carrier who have influence over this.
3) Lack of competition - One example of this is Certificate of Need (CON) or Certificate of Public Need (COPN) laws. Most states, including Virginia have CON or COPN laws. They require healthcare providers who want to open or expand their services or purchase certain devices or new technologies to first obtain permission. Applicants must prove there is a community need and existing providers are invited to challenge would-be competitors’ applications. Read more here.
I could go on, but these are the biggest three. With this dysfunction we suffer with constant prices increase and poor outcomes, the worst of all is a declining life expectancy (see the below graphs).
Overall Healthcare expenditures continue to rise. Costs to Patients have increased together with total Healthcare expenditures. Average premiums in 2021 were 47% higher than they were in 2011 and deductibles have surged 68.4% over the last decade from an average of $991 to $1,669.
Over the past ten years life expectancy in the US has been flat and now it is starting to decline.
What can you do about it?
1) Find a doctor you can trust and you can access. For most this means enrolling in a Direct Primary Care (DPC) practice. In fact a good DPC will not just help you avoid the pitfalls of the healthcare system, but will be able to provide 90% to 99% of the care you need for a flat monthly fee. This can help you save time and money in both the long and short run There is a large body of data demonstrating financial savings, decreed ER visits and reduced specialists consultations with DPC.
2) Consider a high-deductible with a healthcare savings account or a cost sharing group to help you save money and control where your healthcare dollars are spent.
3) Start educating your self with resources like out-of-pocket
4) When needed use a patient advocate to help you navigate the system and figure out if you are paying too much. Some DPCs will help with this.
