Why is Healthcare so Broken?

— Video Transcript —

WHY IS HEALTHCARE SO BROKEN?

MODIFIED VIDEO TRANSCRIPT

I think it’s important for us to quickly talk about why healthcare is so broken.  You can ask any thought leader in healthcare why healthcare is broken and you’re going to get a different answer.  Everyone has their theories, but I’m going to tell you mine.

The system of healthcare we have today, which is generally focused on treating symptoms of conditions rather than the cause, was created at a time when patients weren’t nearly as sick as they are today, and there really weren’t that many treatments or technologies to make an impact.  As we move past the postwar era, and dual incomes became necessary to provide a high standard of living, our lifestyles became more about convenience than health. Nutrition was sacrificed and poor diets increased, creating an obesity academic throughout the United States. This has resulted in a population that is extremely unhealthy. There have been significant technological advancements that also help treat conditions more effectively while conditions are increasing in numbers.

Now healthcare is essentially a collection of misaligned companies trying to solve problems one small piece at a time because no one can really influence everything that is needed for the patient.  Incentives between these companies are misaligned and there’s often competition and conflict of interests. The various companies try to make money off each other and costs for services and products are generally hidden from the buyer.  This is all the while patients still trust her doctor’s judgment more than they do anyone else, but because patients are at a significant information disadvantage, they’re generally ill-equipped to advocate for better care.  Lastly, doctors don’t pay for the cost of any of the tests or meds that they order, or procedures that they do, and that results in a lack of accountability for any of their decisions.

There are a few ways the healthcare community is trying to fix the problem. The biggest trend is a move from fee-based to value-based care. This means instead of getting paid for each service you provide to a patient; you get paid based on the quality of care you deliver. This essentially means you get paid for making your patient better. To help facilitate this many provider networks and health insurance payers are creating care models that roadmap how will patient should be treated for any given condition.  This is supposed to reduce variability and make sure everyone is getting care that is high-quality. In the meantime, nontraditional companies are entering the healthcare space and trying to use technology to address the healthcare crisis. Additionally, our government representatives, whether at the state or federal level, are talking about ‘Medicare for all’ and bringing socialized medicine to the US.

I think it’s important for us to understand where healthcare is today so we can make investment decisions that are aligned with where healthcare is going in the future.