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Published on: February 4, 2010
Time To Change Course on Health Care Reform

According to a recent Gallup poll, 55 percent of Americans want Congress to put health care reform aside for a while.  Only 39 percent want the Democrats to struggle on. The majority is right.  The problem isn’t that the bills in the House and Senate are too sweeping.  The problem is that they are so […]

According to a recent Gallup poll, 55 percent of Americans want Congress to put health care reform aside for a while.  Only 39 percent want the Democrats to struggle on.

The majority is right.  The problem isn’t that the bills in the House and Senate are too sweeping.  The problem is that they are so timid and stale that they can’t address the crippling problems our health care system faces just a few years down the road.  The cold, hard reality that Congress has so far ignored is this:  if we don’t radically and totally restructure health care over the next thirty years, we go belly up.  The stakes in health care reform aren’t about covering the uninsured — though that is a worthy goal.  At stake is whether and how this country can continue to provide good quality health care to anybody who isn’t rich.

Look at the chart below.

Health_Care_GDP

In 2007 roughly 15 percent of America’s GDP went to pay for our health care.  By 2035 this cost of health care will be 31 percent of our total GDP.  By 2082 health care will cost half our GDP.  In other words, by the time today’s twenty-somethings are in their forties, Americans will be paying one third of their income for health care.  Maybe they will pay it in taxes for a single-payer, government funded system.  Maybe they will pay it in insurance premiums for a private system.  Maybe they will pay it in fees and co-payments.  But one way or another, one of every three dollars they make will go to pay health care bills.  By the time today’s preschoolers hit their retirement, everyone in the country will be forking over half their income to pay for health care.

Medicare is going to be a particularly nightmarish problem.  Medicare now constitutes roughly 20% of federal government spending.  Project that thirty years into the future as the proportion and number of older Americans grows and as the costs of treatment for each older American rise, and the spending on Medicare is slated to grow from 4.1 percent of GDP in 2007 to 9 percent in 2032 (page 1), and almost 20 percent of GDP in 2082 (page 2).  The federal government’s tax revenue has only rarely gone as high as 20 percent of GDP; barring enormous tax increases by 2032 roughly half the government’s tax revenue would go to Medicare alone and by 2082 Medicare would consume virtually every penny the government takes in — without very large tax increases or massive sustained deficits.This is just the cost of Medicare–health care for those older than 65.

Back when I was a hopeful young sprout in Pundit School, they taught us to be careful about making predictions.  But I’m willing to go out on a limb here:  this won’t happen.  Come 2032, Medicare will not be eating up 9 percent  of GDP, and health care overall will not be costing 30 percent of the country’s total income.  The American people will not be paying over one of every three dollars they make to buy health care.

Something will happen.  Either we will ration health care much more aggressively than we do now, or we will find much more efficient ways to provide health care.  I vote for the latter, and I think most Americans agree.

This means that change, not stability has to be the number one goal of serious health care reform.  This isn’t about propping up the current system for a few more years, or even about getting more people under the tent.  It’s not even about ‘bending the cost curve'; it’s about whether the system will break down before today’s college students hit middle age.  We have to learn to do health care in fundamentally new ways in the next twenty years.  The changes needed are much more radical and sweeping than anything envisioned in the current legislation — and it will take  a very different mindset to make them happen.  The current bill is a classic example of steady state, blue social model thinking: it is more interested in keeping the status quo going by pumping more money into it than it is in the basic restructuring needed to build a system that will work in the future.

The health care of the day after tomorrow isn’t going to look much like the system we have today. Futurist Ray Kurzweil and a lot of other people believe that thirty years from now computers more powerful than the most powerful supercomputers that exist in today’s world are going to cost less than $1000 and fit in a device smaller than one of today’s laptops.  On present trends, at some point in this century a $1000 computer will have more processing ability than the combined brainpower of the entire human race; it will run software enormously more sophisticated than anything that now exists; it will store your complete medical records, your genetic scans and health information about you and your family’s allergies, drug reactions, medical conditions and so on.

Someday, that computer is going to be your MD.  It will have real time access to every published study around the world — and thirty years from now the number of medical researchers and research centers around the world will be vastly greater than anything we have now.  This ‘doc in a box’ will be able to diagnose and prescribe and it will be connected to even more powerful computers at the local medical center.  The doc in the box will be able to lay out the treatment options and provide individual prescriptions and drug cocktails shown to work best for people with your medical history and genetic makeup.  The world’s medical system will in any case be constantly updated as the outcomes of treating billions of people around the world are constantly fed into the system and evaluated; the treatments the doc box recommends will be tailored for your genetic makeup, your medical history, your height, your weight, and all your prescriptions and medications will be automatically adjusted to take any changes in the research or your health into account.

Right now you have to be rich and well connected to have access to the world’s smartest doctors; with the doc in the box the average person will have direct contact with the most comprehensive and best medical knowledge the world has.  More, patients are going to have a lot more control over what happens with their health care.  The doc box will tell you what your choices are and give you all the information you need to make a decision among the options: the choice will be up to you.  You won’t go to the doctor’s office much; a lot of the work will be done at your home as blood tests and other basic procedures can be done directly with the machine.

No human doctor will be able to match the medical technology of the future.  The function of the people in the system will be less to make decisions than to help patients make decisions based on the information from the computers: they will be more like flight attendants than pilots.  Human beings will still be involved at both the low end and high end of medical work; depending on the way technology advances it would seem that both orderlies and neurosurgeons might still be human.

Nobody, not even a graduate of Pundit High, really knows what the new system will be like.  Still, it is overwhelmingly likely that training for people in the health care system by and large will shift from packing all the knowledge needed for scientific diagnosis into their heads into providing them with skills to carry out special functions that machines cannot do (like, perhaps, surgery) or to provide the emotional support and bedside manner that people need.  Machines will drive the health care train; people will help you feel better about the journey.

This system will no doubt still be very expensive, but it will provide much better health care to many more people than anything we have now at a cost that the old system can’t match.  There is no other way to build the health care system of the future than to move in this direction, and the faster we get there the faster health care will become as good and as accessible as we need it to be.

If we are serious about health care, we need to figure out how to facilitate the transition to this kind of system.  It’s not really something that can be planned; it will be unknown and unexpected technical and intellectual inventions that get us from here to there.  But there are three keys to success: first, to align incentives and redirect resources as best we can so that progress toward this system is rewarded and facilitated.  Second, we must do our best to ensure that the health care system works as well as possible during the transition for as many people as possible.  Third, we must manage the inevitable trade-offs between the two objectives.  On the one hand, we don’t want to get in such a mad rush toward the future that we make health care now even more difficult than it needs to be; on the other hand, we simply cannot let our efforts to keep today’s system on life support choke off the process of change towards what we will desperately need for tomorrow.

At the core, building the health care system of the future involves the increasing use of IT to reduce cost and enhance efficiencies in health care.  For now, that might mean using more outsourcing — having tests read by (cheaper) doctors and technicians outside the US.  But we must also be moving to encourage a major increase of health care R&D into the field of IT-enabled service delivery.  There are, as I understand it, some features of the current bills that move in this direction, and the emphasis on better electronic patient records that many reformers support is an essential step if we are going to build a health care system that can work in the future. There is much more to be done; getting health care right is one of our most important national priorities and ensuring that the federal government’s full weight as a consumer of health care, as a regulator of the system and as the chief source of R&D funding is deployed to accelerate and facilitate the transition to a new system at a new level of both better service and lower price has got to be main goal.

This is going to require some hard work.  For one thing, established interests are going to fight much of this agenda tooth and nail.  Ultimately the new system will ‘deprofessionalize’ many people in the health care industry; doctors will feel a bit like John Henry who lost his life trying to compete with a steam drill.  Think of a clinic in a Walmart, no appointment needed, in which as the IT components of the system improve, the human staff become progressively less and less well trained and less and less in charge.  We will be gradually moving toward a system in which human beings are functioning more as aides — managing the emotional and physical business of caring for patients while the decision making shifts more and more to the machines and the system.  This won’t be universally popular with either medical professionals or patients.  Over the long run, however, it is the only possible way to provide the quality and the quantity of health care that our society needs.

The Opportunity

But if restructuring our health system to enable it to cope with its future requirements is going to be a difficult and expensive challenge, it also represents an immense opportunity.  Getting this right won’t just help solve two of our most pressing problems (controlling federal spending long term and developing a better and more inclusive health system); it will position the United States for economic and technological leadership in the next generation.

Everybody needs the new health care system, not just us.  Rich ‘developed’ countries with declining and aging populations need a system that can provide better care to more people without breaking the bank; rapidly growing countries like China and India will desperately need affordable ways of increasing access to health care for populations that will be hungry for a better standard of living; poor countries need technology and delivery models that can help them leap-frog over several stages of development — just as cell phones made service available in countries without the money or the means to install national land line networks so an IT-based health care system can deliver unimaginably improved levels of care to countries whose overall infrastructure remains spotty and weak.

The United States is better positioned than any other country to develop the technological and managerial infrastructure necessary for the health care of the future.  We have the resources and the internal market to fund the research and make it profitable.  Precisely because we don’t have a national, single-payer system, we have the kind of fragmented system that is more open to the kind of experimental innovation that the development of a new system requires.  We have the base of experienced and skilled researchers and thinkers that a multi-decade, many-sided effort like this requires.  And because our system is closer to the breaking point financially than that of the other rich countries, we have more incentive to make the necessary changes.

If we do this, and develop technologies and business methods (and companies) that can provide significantly higher quality, more patient-empowering and individualized health care on a more affordable basis than the current system, the American economy will enjoy some decisive advantages well into the future.  Our health care companies and technologies will become leading exporters of both goods and services — and a more efficient and effective health care system will provide a competitive boost to every firm and factory in the United States by lowering the drag of health care costs.

These advantages could last for some time.  First, other countries are going to resist change more than Americans do.  The national health care systems of Europe are deeply embedded into the ideology and culture of their societies; it will likely be very difficult for them to embrace new models (which will surely not be without warts and shortcomings) until the old ones are well past their sell-by dates.  Second, having developed an innovative, forward looking health care technology sector, the United States will likely remain a font of innovation and creativity in this field.  Just as Hollywood and Silicone Valley maintained global positions of leadership long after other firms in other countries got into their line of work, so the American high tech health sector can be a dominant industrial player for decades to come.

Innovation is America’s greatest strength.  It’s what we most need to build the kind of health care system we and the world will desperately need not far down the road.  The goal of health care reform — and we need reform, urgently — must be to smooth the path for the kind of innovation our society can produce.  The solution to our health care problem is not to edge closer to an old-fashioned, European style health care system or to stumble along as best we can with the awkward and expensive public-private hybrid we now have; it is to break the mold, do something new, harness the power of technology to solve age-old human problems — to be, as I wrote in an earlier post on this blog, radically American.

The national conversation about health care has a long way to run; trying to rush something through that, whatever its merits, doesn’t get to the heart of the matter is not the best way for Congress to go.

show comments
  • http://BornAgainDemocrats.com Luke Lea

    I feel it would be better to get the idea of universal, or near universal, coverage through now and then tackle the problem of cost containment. The alternative I fear is a racially stratified class society with Malthusian competition at the bottom. Health insurance reform is a way of cementing us together as one people.

  • Anda Olsen

    I would be interested to hear your thoughts on Rep. Paul Ryan’s healthcare proposals. At first gloss it seems to mesh with your long term prediction.

  • Norm

    Alas, I think the Burkean “little platoons” will trump the “one people”. What been manifest in the last year is that current administration proposals get to the nearly last person in the country by putting the current health care arrangements of the rest of us at risk. One doesn’t have to buy every last bit of evolutionary biology to see the logic that people will optimize the benefit for their immediate families over the welfare of unknown individuals across the country.

    I think Dr. Mead is onto something in looking for re-engineering medicine to capture “Moore’s Law”. Back decades ago, the single biggest volume/weight category that I hauled to and from college was the stereo, speakers, and vinyl records. Now that fits in my pocket.

    If a “Doc in a Box” increased a doctor’s productivity by 10x, then you have real “curve bending” cost reductions and maybe extending coverage to all is an affordable piece of charity and not a risk one’s own family’s immdiate welfare. It changes the politics dramatically.

  • Chris

    Medicare will go the way of welfare.

    Eventually, if workers are paying 10% of their income for other people’s healthcare bills, there will be a social stigma for that free ride.

    I don’t think our government system has the will to do a Paul Ryan reform. So it will happen on the social marketplace where people on Medicare will be lumped in with those poor folks who have to buy their beer and cigarettes using food stamps while the other shoppers in line watch.

    People get real testy when they see a direct connection between their taxes and the wasteful personal choices of those around them. It is hypocritical, but true.

  • Leslie Goldstein

    And what is supposed to fuel this health care renaissance? Some malcontent, sluggish government employee perhaps? Or, is it more likely to emanate from old fashioned greed and capitalism. The answer is rhetorical.

    Les

  • http://teapartynews.us David H Dennis

    Luke, the writer here is saying that a diverse system with a wide variety of organizations providing health care is better for innovation than a one size fits all system like traditional Medicare.

    That means no universal healthcare, since that would regulate our whole health system into one size fits all, without any chance for innovation.

    Like the writer of this article, I have a big problem with our current system. if it costs $8,000 a night to have someone in the hospital for tests (which is how I was billed a year or two ago), then there is something extremely out of kilter in our system. The tests I had shouldn’t have cost more than a few hundred dollars. And what’s strange is that I don’t see the hospital, the doctors or nurses as making a particularly huge amount of money. I am frankly puzzled as to where the money goes. (Admittedly the bill was settled for $3,000 by insurance, but that’s still about $2,800 more than I think it should have cost.)

    I’m not sure if I like the author’s idea of a totally impersonal system where expert decisions are made by computer. I would like to still see the human element in our health care. But if you consider that a doctor’s time is worth, say, $200 an hour, and you see him for an average of 15 minutes per appointment (and I’m being generous in a lot of cases), the time actually seeing doctors is not a driver of enormous costs.

    What I would like to see answered is, why is health care so expensive, and what can be done about it? I have asked this question every time I wind up visiting a hospital, and the only answer I get is that nobody monitors their own costs because insurance always pays for it. So the more we force insurance on people, the higher our costs are going to be. This seems logical to me and is an excellent reason to run far away from any of the “insurance reform” efforts I have seen.

    Finally, I have something interesting to toss into the equation. A lot of our sicknesses nowadays are due to lifestyle diseases like diabetes. People get diabetes, and their situation worsens, because it is very difficult in today’s society to limit food intake.

    I believe the solution is simple. Right now, fat accumulation is programmed by mechanisms deep in our unconscious that tell us that we might run out of food at any time and so we need to accumulate fat to be consumed during lean times.

    This is no longer true. Food is always available today. So what if we simply add a microchip to our bodies that would reprogram us to only absorb nutrients we currently need? That would solve the entire problem, and people could eat anything they wanted.

    I believe in solving problems, instead of living with or managing diseases. Why can’t treatments be oriented towards solutions like that? Then people would no longer get diabetes and billions of health care dollars would be saved.

    D

  • Robert Speirs

    People get far too much health care today, most of it wrong-headed and in many cases positively dangerous. Until the system is rationalized costs will keep being exorbitant and health will not improve. Universal health care would just raise the number of casualties. The wisest thing you can do is stay away from doctors completely unless you’re bleeding or have distinct physical pain or a broken bone.

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  • http://www.myrashields.info Myra Shields

    Health care should be for all, just like it is in the UK with their NHS program. It is not fair for people, citizens or immigrants to not be given access to health care just because they do not have insurance cover or have a pre conditioned illness. What are the taxes Americans pay for?

  • http://www.adamkhan.net Adam Khan

    WRM writes:

    > We have to learn to do health care in fundamentally new ways in the next twenty years. The changes needed are much more radical and sweeping than anything envisioned in the current legislation — and it will take a very different mindset to make them happen.

    From Cancering:
    Listening In On The Body’s Proteomic Conversation by W. Daniel Hillis
    :

    > Instead, what we’ll do is we’ll go in, we’ll measure you by imaging techniques, and taking it off of your blood, looking at the proteins, things like that, build a model of your state, have a model of how your state progresses, and we’ll do it more like global climate modeling.

    We’ll build a model of you just like we build a climate model of the globe, and it will be a multi-scale, multi-level model. Just as a global climate model has models of the oceans, and the clouds, the CO2 emissions, and the uptake of plants and things like that, this model will have models of lots of complicated processes happening at lots of different scales, and the state variables of this model will be by and large the proteins that are moving back and forth, sending the signals between these things.

    There will be other things, too. But most of the information is in the proteins. There will be a dynamic time model of how these things are signaling each other, and what’s being up-regulated, and down-regulated, and so on. Then, we will actually simulate that under lots of different treatment scenarios; we’ll simulate for your cancering, how we can tweak it back into a healthy state, having it guided back toward a healthy state. It will be a treatment that’s very specific. We’ll look at those and see which ones are most likely to bring you to a healthy state, and we’ll start doing that, and we may treat you in a very different way than we’ve ever treated any other human before, but the model will say that for you that’s the correct sequence to treat it.

    Right now this would be a huge change in medicine. For instance, the way we pay for medicine is dependent on the diagnosis. You pay a certain amount for prostate cancer, and you pay a different amount for lung cancer. That determines what part of the hospital you get routed to, which doctor sees you, what the insurance company will pay for. If you take that out of the system right now, it’s a completely different kind of a system. I don’t think this will be an easy switch and I don’t know what the sociological/economic processes will be. But it will happen because it will start working better.

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