There are few industries as laden with friction and administrative overhead as U.S. health care. We've become the world's poster child for how to make health care as expensive as possible; according to a study in the New England Journal of Medicine, a whopping $1.1 trillion, or 30 percent of every health care dollar, is spent on administration. That money is the lubricant we have to keep pouring into the machine to keep the gears from seizing. If we continue on the current trajectory, health care could represent half of U.S. GDP by 2050.
As the global population ages, all the problems currently undermining health care will only be amplified. In my upcoming book, Reimagining Health Care (Post Hill Press, 2020),
I break down the industry by focusing on what I call the Ten Culprits, which, I argue, collectively represent the biggest challenge the U.S.-- and, for that matter, the rest of the world -- has ever faced.
It's also one of the greatest opportunities for the creation of new business and innovation, and it can help put health care on a sustainable path for the 21st century -- making it affordable and accessible to everyone. Any entrepreneur would be hard-pressed to read the Ten Culprits and not come up with at least a few dozen ways to build businesses to address them.
1. The anonymous patient.
Despite all the efforts to create medical records that are portable and shareable, there is still no single repository of a patient's data. As patients move from provider to provider and insurer to insurer, continuity of care suffers as their health history is hidden in myriad siloed systems. Existing systems don't work because no single entity is managing all of a patient's data during a lifetime.
2. Higher costs do not equal better outcomes.
Numerous studies have shown there is no correlation between the cost of health care and its outcomes. Try to come up with any other commercial transaction where you can't weigh costs against outcomes, and you'll come up blank. It just doesn't exist, because we would never tolerate it anywhere else.
3. The episodic care conundrum.
The disconnected nature of health care makes predictive diagnostics and interventions nearly impossible. As a result, we are constantly stuck treating individual symptoms and not the underlying issues.
4. The complexity crisis.
A typical primary care doctor has 1,200-1,900 patients. However, according to an article in The New York Times, only 27 percent of doctors' time is spent with patients, whereas nearly 50 percent is spent on paperwork. Attempting to coordinate care for that many patients with an ever-increasing paperwork burden is next to impossible.
5. The missing link.
No single provider or insurer has all the data needed to coordinate your health care. Neither do you. Having the government step in through Medicare For All or a single-payer model isn't the solution. We need independent trusted entities that manage all of a patient's data and coordinate its use. This may be the greatest opportunity for new business-model innovation.
6. Drifting from the core.
Health care providers are spending too much time on the administrative aspects of care, such as documentation, coding, and billing procedures, which distracts them from their core task of caring for the patient.
7. The tragedy of the commons.
Everyone involved in the delivery of health care is forced to game the system in order to optimize their own success metrics, rather than the patient's.
8. Defensive medicine.
According to Gallup, 25 percent of all health care costs are due to physicians protecting themselves from the potential of malpractice. A 2017 survey of 2,106 physicians reported that 20.6 percent of overall medical care was unnecessary.
9. The primary care crisis.
According to the Association of American Medical Colleges, the U.S. will see a shortage of up to 120,000 physicians by 2030. Primary care physicians are the single most important factor in determining quality health care and patient longevity. This undermines the long-term effectiveness of any health care model.
10. The aging of America.
As noted before, an aging demographic will exacerbate the problems of the above culprits dramatically over the next two decades, making today's health care models economically unsustainable.
These Ten Culprits are at the heart of why the U.S. health care system has become the most expensive in the world. However, they are also present to some degree in virtually every industrial-era health care system across the globe, regardless of who the payer is. And as societies across the globe age, they will start to bring every health care system to an economic precipice.
But here's the good news: there are solutions to each of these Ten Culprits, and they represent enormous opportunity for entrepreneurs smart enough to take them on. If successful, they could help build a sustainable U.S. health care system that someday is the envy of the world.