Health Economy - Could the Health Economy Collapse?

I jotted down the outline for this blog on the back of a napkin while eating pizza at a local restaurant. Here were my outline points.

• This week the government felt so alarmed at the state of the financial economy that it decided to spend $700 billion or so to bail out bad bank martgage debts.

• This is not a new idea. Of years, politicians have been proposing to bail out the entire health care industry and the entire uninsured population. If you can cross the free market capitalism line in the finacian markets, why not health care too?

• I am no expert on these matters, but after this week, who is? Anyway, for the last five years or so, the Congressional Budget office has been saying a Medicare bankruptcy is inevitable unless we change our extravagant ways.

• Medicare costs are unsustainable and could trigger a chain of interrelated collapses due patient bankruptices, uncolletable bad debts, collapses of public, academic, and community hospitals followed by a generalized implosion of the whole health system.

• As my dear friend, Brian Klepper, PhD, a noted health care financial watcher, likes to say: “The crisis is real.” Premiums exceed general informtion by 4.4X and workers earning by 3.7X, bad debt is soaring, hospital margins are shrinking, and revnues are dropping.

• As a newly minted back of the napkin expert, I see parallels between the general economy and the health care industry. It’s just a matter of timing, and the general economy went first. Here’s my reasoning.
• We, the royal “we” indicating narrow minded “greedy” experts, have created am untenable situation in which the assets of each are “over-valued.” Why selse would we keep hearing the refrain, “value-based” health care, i.e. better outcomes for the money.

• We have reached a stage at which we have decided we can no longer to “let the market decide’ or let the “risk takers rule.” “ Let the government intervene” is our new mantra.

• We have placed too many of our bets on the “derivatives” in the financial sector and in health care, on big ticket technologies and overly expensive specialists. And we have relied on IT technologies to save the day. The bursting of the IT bubble in the late 90s’s may have been a sign of the future. We can’t google our way to prosperity or depend on PhD computer scientists to get us where we need to go.

• We have overrelied on specialized expertise in financial and health care fields at the expense of genralized common sense which should tell us health care is too expensive, produces uneven outcomes, and results in generalized dissatifaction among patients and primary care doctors. Maybe it’st ime to stop and ask, “Are we getting results for what we’re paying for?

• We hsve too often ignored the complaints of ordinary investors who rely on pension funds, 401Ks, and brokers, and ordinary patients who simply seek to understand how to navigate, to pay for, and to understand a bewilderling fragmented system.

• We have placed too much trust in experts in far-off centalized centers of “expertise” on Wall Street and K-street and Potomac Avenue at the expense of decentralized Main Streets in the U.S.A. Maybe the real answers are in the neighborhood and work floors.

• We have given outsized payouts to executives in investment banks, hedge funds, and strategic investors in universities and other institutions, and to executives in hospitals, health plans, to IT and high tech health fimrs, and to specialists, at the sacrifice of primary care physicians and citizens who want nothing more than affordable, predictable, safe care with catastrophic coverage to avoid bankruptcies.

I have to stop now. My napkin had no more space for outline bullet points.