Tuesday, March 17, 2015

The Modern Day Malthusian Catastrophe: Healthcare Sustainability

The foundation of most healthcare expenditure projections is that the patterns observed in the recent past will continue into the foreseeable future. Patterns of health care use remain the same. Patterns of disease remain the same. Patterns of health care delivery remain the same. More sophisticated models incorporate some change, but again, it is based on the assumption that the rate of change in the future will be the same as the average rate of change in the past. In short, most projections (at least those beyond the next five years) will be almost comically incorrect. They paint a Malthusian Catastrophe in the making - where access to healthcare is limited and costs associated with providing healthcare are astronomical.

These projections paint a picture of a health system that is wholly unsustainable - a picture where the vast majority of public resources are gobbled up by an ever more hungry healthcare system. Gobbled up by providers demanding ever more pay. Gobbled up by patients demanding ever more marginal and incremental increases in longevity or quality of life that come at an ever increasing costs. Note - in the story that is currently told about healthcare and its future, both patients and providers are villains.

In these projections - the future is some ominous place where things go from bad to worse. In these projections, waitlists grow and costs increase.

However, it should be noted that in these projections, the critical assumption is that the status quo will prevail.

Given that the projections are likely painfully correct if the status quo does prevail, the challenge is in developing and fostering a system that embraces change and innovation, rather than stagnation. If a system sees change as a threat rather than an opportunity - the Malthusian Catastrophe becomes more likely. If the system embraces change and the idea that it is possible that more can be done with the resources available, or that the capacity to pay for more can be expanded, then the Malthusian Catastrophe is averted.

The way our system is structured, it has assumed that the way healthcare has been delivered in the past (physicians and hospitals), and the way it has been demanded in the past is the way it should be and will be delivered in the future. It has limited capacity to embrace change and innovation. It ignores the patient and their role, at its own peril.

It is poorly structured to adopt practices that move healthcare from being delivered by doctors and in hospitals - in part because there are large cost-shifting realities. Our system covers almost all medically necessary services provided by physicians or those services provided in hospitals, but little coverage is provided for dentistry, pharmaceuticals, or other practitioners. As such, even if a pharmaceutical becomes the more effective treatment modality, there is an incentive for patients to choose the less effective or efficient modality simply because doing so is free, whereas the alternative might incur potentially large out-of-pocket expenses. Pursuing the "better level of care" - with things that often turn out to be preventative or prophylactic but incur out-of-pocket expenses becomes the domain of those with the resources to do so - and the gap in health status between the top 5 percent and the bottom 5 percent widens. This speaks to the need for the system to be far more comprehensive in its view of what is, or is not "healthcare" that is to be covered or subsidized.

It also speaks to the unspoken trade off between equality and equity that has been made. Everyone is equal - meaning all those with bad hips are served equally badly, while all those with heart attacks or cancer are served equally well. As a result, the level of satisfaction with the system largely depends on whether or not you happen to have your specific needs met adequalty and that largely depends on what those needs are and whether or not they have been deemed worthy of adequate resources. A poor man who happens to need pharmaceuticals is just as screwed as the well-to-do in need of a new hip - neither has their needs met and might be better served by a system that would cover the pharmaceuticals of the poor man and permit the rich man to spend his own money to get access to a new hip.

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