The attempt to “repeal and replace” the Affordable Care Act has suddenly made health care dysfunction a hot topic in the US.
For example, today, in my local paper, the Providence Journal, Dr Timothy J Bainbeau, the CEO of the Lifespan Health System, the biggest regional health system weighed in on the problem of high and increasing health care costs. A close reading of his commentary suggests how the leadership of big US health care organizations needs to think about whether their actions have become more of the problem than a source of solutions.
The CEO’s Diagnosis and Prescription
Dr Babineau began unremarkably with:
American health care is expensive. Too expensive. On this, there is little debate. In 2001 the median U.S. household spent 6.4 percent of its income on health care; by 2016, the same household spent 15.6 percent of its income on health care. That bigger share of the pie leaves less for other essential purchases, such as food, education and housing.
What was his diagnosis? He stated that most costs are incurred in the care of severe acute or chronic illnesses. So his prescription was:
A critical (but often overlooked) point is the fact that as much as 40 percent of spending during chronic and complex episodes is avoidable if providers and systems adhere to established standards of care. Reining in runaway health-care spending must involve better management of high cost episodes of chronic and complex care.
Rather than debate the actual percentage that is ‘wasteful spending’ (now commonly referenced at around 30 percent) we would be better served by continuing the hard work of identifying and eliminating areas within our own systems where needless variations in care add cost without improving outcomes.
– Naked Capitalism