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Healthcare Has a Greed Problem

Preston Alexander, healthcare entrepreneur, explains that we do not really have an affordability problem in healthcare, but a mismanagement problem.

Healthcare is decidedly NOT affordable.

But there is more to it than that.

The first problem is that we are defining healthcare wrong.

Healthcare currently is essentially sick care delivered on medical campuses that often do not pay taxes and have incredibly high overhead.

 

The first problem is that we are defining healthcare wrong. Healthcare currently is essentially sick care delivered on medical campuses that often do not pay taxes and have incredibly high overhead. Click To Tweet

 

It is a bloated system of administration where hundreds of billions are spent on sales, marketing, “R&D”, “new” devices, buildings, lobbies, lobbyists, software, EHRs, revenue cycle management, avoidable surgeries, avoidable negative health events, group purchasing organizations, pay to play fees (kickbacks), pharmacy benefit managers, speaking fees, consulting fees… the list goes on

These things are not affordable.

 

What is affordable is healthcare, defined differently.

Doctors and clinicians free to manage a patients health for the sole benefit of the patient.

Public health initiatives that focus on health, prevention, addressing the social determinants of health we talk about but do so little to impact.

Programs to keep people healthy.

That is affordable.

 

Incidentally, sick care is also affordable.

The issue is the games we play.

A hospital has to make money right? No margin, no mission.

So naturally it charges made up prices it never expects to net in hopes to offset poorer paying insurance contracts and planned bad debt.

The insurer does not pay everything but is happy to have rates increase because the only way to make more money as an insurer is to have higher revenue.

Their profit margins have a cap.

 

Incidentally, sick care is also affordable. The issue is the games we play. Click To Tweet

 

So when they have to pay out higher claims they have an excuse to raise premiums and deductibles.

Only way to make more money other than getting more members.

But if you took a hospital back to its real purpose, get rid of administrators whose only job it is to make money, don’t have hoards of people playing games with insurance companies, and did not need a brand new campus or lobby or waterfall to compete with the hospital down the road, then THAT would be affordable.

 

We do not really have an affordability problem in healthcare.

We have a mismanagement problem. We have a greed problem. We have a definition problem.

My biggest issue with healthcare is that it is all fixable. And affordable.

But it is a choice. To let the system continue to run as it does today.

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