No, this is not about the Occupy Wall Street protests that are sweeping the country and gripping the world. This about something that may be even more pervasive in our everyday lives.
In Camden, 1% of the population accounts for 30% of healthcare costs.
Through a recently published article on the Global Health Hub, I came across a New Yorker article published back in January of this year about the efforts of one doctor, Jeffrey Brenner. It’s a little long but tells a fascinating story, and if you have any interest in our nation’s rising healthcare costs, the potential of health informatics, or the role of prevention in the future of healthcare, I strongly recommend you read it.
When we talk about rising healthcare costs in this country, we rarely go beyond the general statistics of rising overall healthcare expenditures and low insurance coverage. If we did, we might find what Dr. Brenner and others around the country are just beginning to see: the distribution of healthcare expenditure is very skewed, and it tends to be rather predictable geographically where the sickest patients reside.
This has incredible implications for how we go about combating the problem of rising healthcare costs. The traditional response to increasing reimbursement costs, from an insurance company’s point of view, is to increase premium or copayment rates for everyone. Make everyone pay more for healthcare, and they’ll think twice about going in for unnecessary care. Simple price and demand, right?
Wrong. There’s a doctor by the name of Nathan Gunn who leads research for a Boston-based health informatics company, investigating the reasons for escalating healthcare expenditures. In analyzing healthcare costs for a large company which recently increased copayment rates, Gunn found that the strategy backfired completely. The vast majority of employees did reduce healthcare utilization rates. So did the sickest patients—for whom, healthcare costs skyrocketed because they put off needed care until it was too late.
This last point hints at a crucial point that health policy players seem unwilling or unable to grasp: the only way to control healthcare costs in the long run is through shifting toward prevention. Offering more people insurance doesn’t intrinsically reduce healthcare costs. Giving people the option of catching and treating their conditions earlier does. And while the Affordable Care Act is admirable in its goals to expand coverage to 30 million Americans, its failure to incorporate strong cost-control incentives does not bode well for the future of healthcare costs in this country, as evidenced by the lingering effects of Mr. Romney’s similar healthcare law in Massachusetts.
And a move toward prevention is going to constitute nothing less than a paradigm shift in the way we think about healthcare in this country, pushing aside the excessive diagnostic exams, the bloated pharmaceutical companies, and the alphabet soup of delivery models (HMOs, PPOs, POSs, ACOs) to put the HEALTH back in healthcare.