The Healthcare Dystopia, Part One

Today’s healthcare systems need work. The blockchain will make it happen.

Part Two is available, here: https://medium.com/healthsapiens/the-healthsapiens-utopia-81710fe7a1e1

In part one of this two part series, we will be illustrating some of the fundamental problems with current healthcare systems found across the world. By demonstrating some of the strengths and weaknesses found across different healthcare systems, we are able to show how and why we are building the HealthSapiens platform, and explain how the HealthSapiens platform is designed in order to solve the alignment issues found in industry. If you are interested in diving deeper into these issues, please read our whitepaper.

Healthcare issues are among the thorniest problems plaguing the world today. Constant technological medical marvels amount to ever-increasing costs. Debate abounds about who should be afforded healthcare and what limitations should apply to whom. Those with the means can’t always access quality care. The resulting current system is patients are paying too much, waiting too long, and foregoing the basic human right of a healthy quality of life.

Healthcare is a major expense worldwide and is estimated to account for $3 trillion in spending in the United States, and $6 trillion globally. Combined healthcare 1 spending in the five major world regions is expected to reach 8.7 trillion by 2020, up from $7 trillion in 2015. Global healthcare spending is projected to increase at 2 an annual rate of 4.1% in 2017–2021. These rapid increases in healthcare prices forces more and more healthcare consumers to be priced-out of healthcare every year. With this current pattern of increasing prices, healthcare is becoming a luxury commodity instead of a basic human right. The poor are often left unconsidered when it comes to the healthcare industry; it simply isn’t profitable to serve these people.

The United States is not exempt from this; rather it is an exemplar of a broken system. Higher spending levels haven’t shown to produce better health outcomes. For example, the United States continues to spend considerably more on healthcare (16.9% of GDP in 2016) than comparable countries, but it is in the lower half of the life expectancy rankings. While many different factors contribute to the lowered life expectancy of US citizens, it can be seen that the current US healthcare system is not being effective in mitigating the issue. The United States healthcare payment system has been predominantly a fee-for-service model, and this has enabled a model of healthcare whereby a large driving force is obtaining profit. This has undermined the consumer-centric nature of the healthcare field.

It is the HealthSapiens belief that the fee-for-service model is sub-optimal method for generating income for healthcare services. A fee-for-service model provides no economic incentive for care providers to be attached to a patients well-being. In-fact, a fee-for-service model incentivizes care providers to see the same patients repeatedly, as truly helping a patient would mean that they lose a source of income for their business, as ‘curing’ the patient means that they are no longer seeking healthcare services.

Fundamental Problems of Each System

Every centralized system of providing heathcare comes with barriers; as is the nature of permissioned systems. In addition to limited access, the centralized nature of healthcare services enables costly, non-transparent and inefficient middlemen and service models. Ultimately, the consumer of healthcare is forced to settle for whatever service is offered to them, rather than being able to have provider competing to serve them.

Citing problem #1, having poor access to care also sets up a positive feedback-loop of systemic healthcare costs. The more difficult healthcare access is, the less incentivized individuals are to go seek preventative care. This shifts individual heathcare behaviors from being proactive, to reactive, where individuals only seek care after an illness has gotten sufficiently bad, and they are finally motivated to seek care. At this point, there will be further incurred costs for this individual, and the system at large, because more needs to be done to return this individual back to a healthy state. Had an individual had access to care at their fingertips, these costs could have been prevented by a more proactive system.

As mentioned previously, lack of access to care causes an increase in hospital and urgent care visits. According to the CDC, 79.7% of non-admitted emergency room patient visits were due to lack of access to a healthcare provider. A recent study estimated $734 billion (27%) of all healthcare spending was wasted on unnecessary services, inefficiency and inflated prices. 71% of emergency room visits with employer-sponsored insurance coverage are ambulatory sensitive, and could have be managed in an outpatient care center.

The unnecessary intermediation of third parties in the healthcare system, such as by insurance, brokers, and regulators, can provide a signfi barrier to access. The need to obtain healthcare via or with the approval of an intermediary can create massive inefficiency that frustrates patients and providers. The time and costs related to healthcare billing are astronomical; patients are often waiting days to weeks for approvals and treatment, each intermediary adds costs which are passed to the consumer, and every party has incentives that go against the incentives of others.

If people take better care of themselves, countless medical conditions could be prevented. The foundation of our current healthcare system is the treatment of illness and disease rather than the promotion of good health. If we created the conditions to make it possible for people to take better care of themselves, countless medical conditions such as type II diabetes, certain cancers, heart disease, and obesity could be prevented.

Many current healthcare systems are sick-care models, meaning that they generally wait for people to get sick and then treat them, at the expense of more preventative methods of providing healthcare.

In order to remain in business, doctors are spending less and less time with individual patients so they can see more patients throughout the day. By shortening appointment times, important information and symptoms may be missed or dismissed, leading to misdiagnosis or undiagnosed problems.

Bad actors are not incentivized to give a correct diagnosis in current healthcare fee-for-service systems. Extensive testing or unnecessary procedures are rewarded with higher profits. Even with a second opinion, misaligned incentives can lead to bad outcomes without a patient even realizing it.

Thanks for reading about the current problems facing healthcare, and how the blockchain will help us get there. We’ll hope to continue the conversation with you on our Telegram: www.t.me/HealthSapiens

-HealthSapiens, find us at www.healthsapiens.io