There is a clear philosophical difference between our two main political parties, and these differences will affect key aspects of health care, such as the role of government vs. commercial enterprises. This will influence very important aspects of how citizens procure health care. However, make no mistake, our health care dilemma is all about its cost; it has nothing to do with what political party has control.
What has been proven is that the system is too costly under the Affordable Care Act (ACA) and it was much too expensive prior to ACA. The complexity of the health care system is vast and daunting. The problem is that we try to tackle too many issues at once and don’t make the fundamental change that will break loose the necessary transformation from a bloated system.
The United States health care system currently consumes 17.5% of the country’s gross domestic product, totaling over $3 trillion. Americans want the finest health care available at the drop of a hat, along with the ability to see any physician at any health care facility irrespective of the cost. The issue is that our country cannot afford this healthcare approach that insulates the consumer from cost and does not reward or penalize the service providers for effectively combining cost and quality. Currently employers, individuals and our government commit far too much time, money and resources to this segment of our economy.
The assumption is that health care quality will be compromised if we control cost. Unfortunately, we have a distorted view of both cost and quality when it comes to health care. The challenge that must be addressed is not how to share the enormous amount of health care spend, but how to reduce this massive burden.
One would think our country’s health care is second to none. However, it is actually ranked 37th in the world based on the World Health Organization’s annual rankings of healthcare systems. The good news is that we did beat out Slovenia at #38 and Cuba at #39. The health care cost issue is, of course, very complex and we can attempt to dissect it until the cows come home.
However, it can be boiled down to one fundamental challenge: health care costs are paid for by third parties (either the government or private insurance). Both of these approaches insulate the consumer from the true cost of services and eliminate consumerism. If you don’t pay for something, you don’t care what it costs and you also feel empowered to demand the finest quality irrespective of the impact on your health outcome.
In turn, this insulation from cost also deters innovators from entering this space. What would the payoff be for the Walmarts or Amazons of the world to enter this space? This answer is very little given the high risk and enormous investment that would be necessary. If you can offer quality services at a highly reduced price, who cares under our current system, with or without the proposed changes under a new administration?
Costs in the form of exorbitant premiums, extremely high deductibles and other forms of cost sharing are impacting Americans’ financial stability. In the private insurance employer-based system, the challenge has been met by using concepts such as consumer-driven plans (high deductible health plans), wellness and a myriad of other ineffective approaches. The problem is that the system is structured in a way that allows insurance companies to influence the cost passed on to consumers.
As most Americans in the private sector access health insurance through their employers, it’s important for organizations’ decision makers to understand the levers to reduce cost and increase value for their employers and their families. Cost sharing should not be the answer to managing cost due to the detrimental effect this has on employees’ disposable income. Company leaders should not accept the status quo related to plan management, cost and value. They should question every decision and manage health benefits in a financially responsible way they would purchase any other goods or services.
Not surprisingly, there are many quality health care services that can be purchased at a reasonable price and provide high-quality outcomes, but few people are aware and informed on how to utilize them. There are many more services that can be deployed if our current system would stop protecting high-cost, average to below average quality, healthcare providers.
By rewarding and incenting the appropriate deployment of cost and quality, we could open the market to innovators who would know that the reward would be worth the risk. More than ever, it’s time to revolutionize the health care system from a variety of perspectives. Not just because the Affordable Care Act is a topic of debates, speeches, and political agendas, but because all Americans deserve quality at affordable prices.