Tuesday, March 13, 2007

health care general, future - What in the World is Going on in Health Care?

What’s going on is fracturing, refracturing, individual markets, fast changes, instability, and a an accelerating transition to a consumer-driven system as employers shift costs to employees and as employees become independent contractors supplying their own benefits. At least, that’s what a former national intelligence official thinks.

A friend of mine, Stephen Barchet, MD, of Seattle, formerly head of Medicine for the U.S. Navy, retired, a proponent of wellness and health programs as the core of health reform, just sent me a presentation by Herb Meyer, formerly a high official on President Reagan’s intelligence team, the first U.S. Intelligence official to predict the Soviet collapse.

Four Major Global Transitions

In the presentation, ‘What in the World is Going On? A Global Intelligence for CEOs,” Meyers speaks of implications of four major transformations on America– the War in Iraq, the Emergence of China, Shifting Demographics of Western Civilization, and Restructuring of American Business.

These are important transformations, but I shall restrict this blog to health care implications of restructuring of American business on American health care. To me what Meyer is saying is profound, but that’s up to you to judge.

Restructuring of American Business and Health Care

Here, for your consideration, are his conclusions.

“The restructuring of American business means we are coming to the end of the age of the employer and employee. With all this fracturing of businesses into different and smaller units, employers can't guarantee jobs anymore because they don't know what their companies will look like next year. Everyone is on their way to becoming an independent contractor. The new workforce contract will be, a Show up at the my office five days a week and do what I want you to do, but you handle your own insurance, benefits, health care and everything else.”

“Husbands and wives are becoming economic units. They take different jobs and work different shifts depending on where they are in their careers and families. They make tradeoffs to put together a compensation package to take care of the family. This used to happen only with highly educated professionals with high incomes.
Now it is happening at the level of the factory floor worker. Couples at all levels are designing their compensation packages based on their individual needs. The only way this can work is if everything is portable and flexible, which requires a huge shift in the American economy”.

“The U.S. is in the process of building the world's first 21st century model economy. The only other countries doing this are U.K. and Australia. The model is fast, flexible, highly productive and unstable in that it is always fracturing and re-fracturing. This will increase the economic gap between the U.S. and everybody else, especially Europe and Japan.”

“At the same time, the military gap is increasing. Other than China, we are the only country that is continuing to put money into their military. Plus, we are the only military getting on-the-ground military experience through our war in Iraq. We know which high-tech weapons are working and which ones aren't. There is almost no one who can take us on economically or militarily. There has never been a superpower in this position before.”

“On the one hand, this makes the U.S. a magnet for bright and ambitious people. It also makes us a target. We are becoming one of the last holdouts of the traditional Judeo-Christian culture. There is no better place in the world to be in business and raise children. The U.S. is by far the best place to have an idea, form a business, and put it into the marketplace. We take it for granted, but it isn't as available in other countries of the world.”

“Ultimately, it's an issue of culture. The only people who can hurt us are ourselves, by losing our culture. If we give up our Judeo-Christian culture, we become just like the Europeans. The culture war is the whole ballgame. If we lose it, there isn't another America to pull us out.”

My Take

You may have a different take on Meyer’s conclusions and their implications that I do. My take is that restructuring of business will drive the U.S. health economy towards individual consumer-driven care and will cause it to restructure to accommodate business fracturing and refracturing.

This, in turn, will culminate in faster, more flexible, more unstable, but more productive changes in the health economy. It will shift health markets towards more individual responsibility, preventive measures, and wellness consciousness.

Meyer obviously hopes the U.S. culture will not seek to mimic the Europeans who depend heavily on government programs rather than marketplace adjustments. It’s secular progressives via a via conservative capitalists. As he says, “The culture war is the whole ballgame.”

Whether the U.S. health care culture will drift from the marketplace to government dependency remains the central $4 trillion (our projected health costs by 2030) of our time. It all boils down to who wins the debate between those who believe the answer lies in mandated and expanded government programs or the free market’s potential to keep costs down and coverage and choices up.

Whatever happens, we’re now moving towards the end of the traditional employer employee relationship, conversion of employees into individual contractors, greater individual responsibility for providing for their own care and insurance, and more flexible benefits in the unique U.S marketplace culture.

I will leave it to you to decide if this new direction is good or bad, humane or inhumane, propitious or malicious.

No comments: