Why Healthcare Spending Costs Don’t Matter: A Response to WSJ’s “GOPers Think US Health Care Rocks…”

Wall Street Journal’s Article, “GOPers Think U.S. Health Care Rocks, Dems Not So Much”

“America has the best medical care in the world,” Rudy Giuliani said last year.

Most Republicans agree with him, but most Democrats don’t, according to a new poll from the Harvard School of Public Health. The difference is striking: 68% of folks in the Grand Old Party said the U.S. has “the best health care system in the world,” compared with 32% of Democrats. Forty percent of independents said we have the best care.

I hate to split hairs, but the crux of this question involves the word “system.” Do we have the best physicians world-wide? I think so. The best technology? Again, I think we might. But does our healthcare system provide consistent, successful preventative care for all? As anyone working in healthcare would tell you, not at all. And as Cato notes, that systemic failure creates outcomes which organizations like the WHO over-weight in their rankings.

That said, I think the notion of ‘costs’ are a bit of a red herring — healthcare has its own economic forces and changes to these economic inputs and outputs would impact associated ‘costs.’ For one, fairly compensating hospitals for the cost of healthcare provided would be a start. Why? Because whenever the federal government or insurers reduce the reimbursable level for providers without regard to dollars only, they do not provide incentives for providers to innovate or increase efficiency. Instead hospitals, who often have months if not weeks to react, raise their fees on the only group they can – patients who pay out of pocket; patients without insurance.

The ‘rising costs of healthcare’ is a red herring as well. I’ve seen doomsday statistics that cite the rate of healthcare spending is growing at twice the growth rate of the U.S. GDP and by 2040, such spending would be larger than the U.S. GDP.

To which I respond: Yeah. Right.

Should anyone quote such a statistic to you, please assure them that those same statistics mean healthcare spending is only rising 3% over GDP annually. Or you might note that such figures include elective care which means patients are participating more in receiving care via discretionary income. And then suggest that a simple solution would be for the U.S. economy to grow at 6% per year as it did back in the 1990’s. (If you really want to win the argument, ask what percentage of current yearly GDP growth is attributable to the investments made in healthcare technology and life sciences over the last 20 years. Suggest greater than 50% of it.)

Ultimately, I believe the healthcare system needs to be measured on outcome, quality, and efficiency first and ‘costs’ second. As we tell our clients, if you focus on ‘costs’ you’ll the miss the results and the converse is true: if you’re focused on results, the costs seem like a minor point.

Perhaps if all Americans could participate in receiving quality healthcare that managed their entire course of treatment, with universal, electronic medical records available to every provider along the way, we would feel a lot better – both about ourselves and our healthcare system.


About Paul Griffiths

Paul has been CEO of MedTouch since April of 2007 and, prior to that, held the position of COO. As a co-founder, he has helped set the vision for the company from its inception. Paul is an active speaker in the healthcare marketing community. In addition to the dozen webinars MedTouch presents each year, Paul can be seen and heard giving lively talks around the country about helping healthcare organizations succeed online: from New England (NESHCo), to Tennessee (TSHPRM), Florida (FSHPRM), and Las Vegas (Annual Healthcare Internet Conference). Prior to MedTouch, Paul managed online brand experiences for a variety of for-profit and not-for-profit organizations. He has over 15 years of combined experience in online commerce, interactive marketing, experience design and content management solutions. Most notably, he directed the consumer-facing channel for the now defunct Send.com, an online gift delivery network that raised $45 million from such VC luminaries as Greylock, Highland Capital, Benchmark and Charles Rivers Ventures in the late 1990s. Paul earned a Master of Arts in Creative Writing from Boston University, and a Bachelor of Arts in Creative Writing from Sarah Lawrence College. When he’s not traveling across the country to visit clients or to speak at healthcare conferences, Paul runs a humanitarian non-profit with his wife. He’s thrilled to finally have a yard for his dogs and two boys, and often daydreams of spending a summer in Iceland.

One Response to “Why Healthcare Spending Costs Don’t Matter: A Response to WSJ’s “GOPers Think US Health Care Rocks…””

  1. You are spot on. Capital investment in health care in relationship to the number of employees is far below that of general manufacturing. That is to say, we are happy to spend money on advanced diagnostic technologies and large building expenses and less likely to seek technologies which are aimed at improfing the efficiency of the health care provider. Frankly, I believe a growth area in health care are those companies whos services and technologies improve the efficiency of those providing care. In this, perhaps we are not spending enough.

    Tom

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