IN SHORT: Out-of-control health care spending exact an enormous and growing toll on Americans. The scale of the broken US health care system reveals itself in tragic ways. Fraud accounts for about $300 billion of annual US health care spending. Many employers no longer try to contain health care spending, but many more are fighting back. The Future of Health Care is Local, Open, and Independent
As of 2020, the health care system in the United States consumes a full fifth of the American economy. It has become a machine that does not improve health, but proves perfectly attuned to extracting money. Every year, more than any other factor, health care bankrupts Americans, even though 70% of them have insurance. It sucks so much money out of cities, towns and communities that public education, policing and social services have atrophied in many places across America.
For workers, health care costs have caused wages to decline or remain stagnant in real terms for decades. Spiraling health spending consume funds employers might use to improve worker benefits and salaries, and to help fund community initiatives – as many once did. Nothing compromises the American Dream more today than the US health care system.
Increasingly, communities, businesses and organizations nationwide are taking back health care. They walk away from big, conglomerate-run systems that take (and lose to rampant fraud) between half and three-quarters of every health care dollar out of the communities they purport to serve. They fire their mega carriers and put health care in the hands of the people who care about it most – patients.
Hospital care, surgeries, and pharmaceuticals account for only 20% of health outcomes but consume the great majority of spending.
Fraud drives up the cost of insurance, but insurance companies don’t pursue it as banks do credit card fraud. When, for example, claims show the same person receiving multiple hysterectomies or circumcisions, the system usually fails to catch the perpetrators and recover the money. The system floods the streets with drugs from fraudulent prescriptions. Incentives allow carriers to keep 30%-40% of the money they get back from fraud. The true losers are businesses, communities and Americans.
Health 3.0
The 3.0 version of health care combines the personal and local care of 1.0 with the data and technology-driven health care of 2.0, to capture the best of both. By keeping money local, employing modern best practices, and leveraging supportive local, state and federal government, health care can prove twice as effective at half the price.
Employees worry about risks to their benefits. Address their concerns with care. Educate them on the state of the US health care system, its perverse incentives, and how it puts them at risk even if they have insurance. Employers should remind workers that the US is the undisputed world leader in medical-bill-driven bankruptcy – the No. 1 cause of bankruptcy for Americans. What is worse, 70% of those people had health insurance.
Illustrate the consequences of the system’s shortcomings using the opioid and COVID-19 crises. Help them envision what true patient-centered health care can look like. Build support from the grass roots, communicate often, address naysayer concerns respectfully and openly, and highlight quick wins. Listen to employees, and change methodically – don’t try to implement everything overnight. Do it in stages, building on and solidifying your successes.
Seek out local providers of primary care who bundle physicians, health coaches, nutrition experts and wellness advice into per-patient subscriptions, covering visits and preventive care. They should offer same-day appointments, modern technology and transparent, portable electronic health records.
Discourage employee use of providers – including pharmacies – other than those you screen and approve for excellence and low costs. Build your relationships directly, and work with your benefits adviser – not through a preferred provider organization (PPO).