Two Americas: Healthcare.

A few people have asked me to comment on Atul Gawande’s most recent piece in The New Yorker, The Hot Spotters. Here’s a snapshot:

“He found that between January of 2002 and June of 2008 some nine hundred people in [just] two buildings in Camden, NJ accounted for more than four thousand hospital visits and about two hundred million dollars. One patient had three hundred and twenty-four admissions in five years. The most expensive patient cost insurers US$3.5 million.

I’ve written about this in the past, but it’s quite clear that there are two Americas when it comes to healthcare – small spenders and astronomical spenders, with very little in between. The problem is…how do we pay for astronomical spenders’ healthcare? Sick and/or dying patients are cash cows for doctors and hospitals. More sickness = more admissions = more money.

Literally, the only solution to the healthcare cost problem is to design ways to pay hospitals and doctors to keep astronomical spenders healthy and away from them rather than let them continue to profit off sickness. Until this happens, healthcare costs will continue to spiral out of control. My solution would be to create two systems with two different business models:

• The first system would focus on light spenders (those who spend less than $10K per year) and would essentially be the same fee-for-service system that we see today but much more patient centric, so that you can email your doctor questions and make appointments online and such.

• The second system would be for people who spend over $10k a year. Once you spend over that amount of money, the government or a private insurance company purchases your healthcare with a different business model– they would pay for your healthcare with one lump yearly sum and leave it up to your chosen healthcare delivery network to do everything it can to deliver healthcare to you within the constraints of say $50,000 per year. If that network did a good and efficient job and kept you healthy for the year, they would make money. If they did a poor job at keeping you healthy, they would lose money.

It’s the only way to fix healthcare costs. Turn the system’s business model around and give doctors and hospitals more money for keeping astronomical spenders’ well, rather than profiting off how sick they are. If this went into effect next year, we’d see savings of at least 30% of total healthcare expenditures in America.

Two Americas: Healthcare.