Disrupting the healthcare business model

With the federal debt ceiling at 14 trillion, this allows us an opportunity to reflect on where our money goes and what is driving much of our debt.

From the Center for American Progress:

“Our nation’s long-term federal budget deficit problem is almost entirely a health care problem. Ten years ago, 17 percent of the federal budget was devoted to the two largest health care entitlement programs, Medicare and Medicaid. Over the past decade, that share climbed to 21 percent and is expected to reach 25 percent by the end of this one.”

Healthcare is not getting any cheaper. However, what happens when the entire business model for healthcare is wrong? Are controlling costs possible if there is no reasonable solution to change the way business is done?

One example helps prove this – hospital readmissons. We know there are certain things that can be done to reduce hospital readmissions, and having more robust primary care (and coordination) is one of them.

However, the hospital readmitting is still paid for that readmission, right? What happens when someone says they will stop paying for the readmission because “it shouldn’t have happened and could have been avoided”? This is literally happening right now as payment is being stopped for avoidable readmissions.

It’s worth thinking through.

Since the deficit is tied directly into healthcare, it may be time to start to consider new options for how business is done.

From one of the best thinkers on “disrupting” healthcare, Clayton Christensen:

“An important lesson from our studies of disruptive innovation is that the hospitals providing much of today’s health care cannot, and therefore ought not, be relied upon to transform the cost and accessibility of health care. Instead, hospitals need to be disrupted. We need them to cede market share to disruptive business models, patient by patient, disease by disease starting at the simplest end of the spectrum of disorders that they now serve.”

He goes on (pay attention to this point):

“‘We will do everything for everybody’ has never been a viable value proposition for any successful business model that we know of–and yet that’s the value proposition managers and directors of general hospitals feel they are obligated to put forth.”

Patients, providers and policy makers concerned about our national debt need look no further than the service that everyone needs and deserves – healthcare. Maybe through creative disruption of a flawed business model we can begin to make a bigger change in healthcare.