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| Health care cost management – How can we address it for long-term |
According to the latest available data from CDC and CMS, the Healthcare cost has steadily increased from $27.2 billion in 1960 to $3.2 Trillion in 2015. Currently, Healthcare cost is 17.8% of the GDP compared to just 5.1% in 1960. Health care cost is expected to grow at an average rate of 5.8% per year till 2025. In 2025, Healthcare cost will be 20.1% of the GDP. The question we need to ask is what will be left to spend on Education, Infrastructure, and Security (the three pillars of America’s growth engine) after spending on Healthcare and paying interest on our national debt.
We have all read and discussed how many players including the government is trying to slow down the annual growth rate of Healthcare spending with varying degree of success for over a decade now. Even if we are successful to slow down the growth of Healthcare spending to the annual rate of inflation, I think we have not truly solved the problem. The reason being – we have only tried to solve the symptom of the problem not the root cause of the problem. I do agree that the current efforts to slow down the Healthcare cost are absolutely necessary but we will also have to solve for some root causes that generate cost for the Healthcare industry
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In my opinion, following are some of the root causes we need to focus on:
Legal system: Our legal system needs to be reviewed and revised to create more trust in the professional opinion of health care professional (after all the brightest of the crop go to Medical School). The current system creates an environment for defensive practices, resulting in over $300 Billion unnecessary tests and prescription.
Consumer behavior: We need to make the consumption of unhealthy food and substances less available to the participants of the healthcare system. As of Oct 1st, the UAE imposed a 100% excise tax on unhealthy goods (Tobacco and Sugar drinks) to reduce obesity, cancer, and many other life-styles related diseases. Is this a lesson to us from the UAE? Late detection and risk management: A close friend of mine talks very passionately about how IoT (Internet of Things) and sensors can detect the health of an elevator by continuously monitoring its vital signs and uploading the data to the cloud for analysis and proactive intervention.
On Sept 27th FDA approved a device from Abbott where a sensor can be inserted in arms of an individual and can measure the blood glucose level without pricking the finger for blood. With this technology we could possibly extend this innovative thinking to develop a sensor to measure and monitor all the vital signs and get early detections of ailment.
Gross National Happiness: I am not propagating to take our attention away from Gross Domestic Product but can we learn from Tibet where the Gross National happiness has equal, if not more, emphasis over GDP. Scientific data supports that a happy person living in a happy society will have fewer diseases. Looking forward to others thought to manage health care cost both on a short and long-term basis.
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The Author: Niraj Krishna
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Digital Transformation | Product Development Lifecycle | Bigdata | AI/ML | Population Health | Healthcare Value Chain | Retail | Leadership Development
Operational and strategic change agent with an extensive track record of success in Health Care and Retail Domain. Employs an end-to-end view of operating success to ensure holistic improvement versus simply functional improvements. Loves to cook and travel with family, also a beginner golfer (acquired skill during COVID) Leader of people, who places a premium on staff development, fostering the continual building of organizational bench strength and ultimately company performance. Demonstrated capability of consistently and concurrently driving Strategy, Road-map planning, and Execution for large scale transformation initiatives to deliver best/first in class products, and operational excellence. Contact Info: [email protected].
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