The Health Care Matrix

or more properly, For-Profit Sickcare

When I was young — and by young I mean 34 — I thought that I was a consumer of health care, making choices about my health, based on an understanding of risks and benefits, and paying for those choices with my insurance and copay dollars.

Then I became less naive. One of the first surprises for me was learning that many drugs are prescription-only not because they are dangerous and need to be regulated (although some certainly are), but rather because if the are prescription-only, then your insurance will pay for them.

The next step was realizing that most health care products are marketed primarily to physicians. This may be obvious to the less dense, but my operating assumption was that the person who ingested the drug or underwent the surgery was the actual consumer. But no, to the health care world, the physician is the one who primarily makes the decision. This makes sense because of course they know things I do not. And I almost always rely on their advice. If they say something, I (like many people) am likely to believe them. So, if you want your health care product to be successful, it needs physicians to believe in it, suggest it to their patients, and write prescriptions for it.

Not only that, but it was a painful realization that I did not really know what anything actually cost. I knew what my out-of-pocket costs were. And I knew what I was paying in insurance premiums. But I did not know what this antidepressant cost, or what that knee surgery cost. I only knew that the generic at WalMart was 4$. And whatever it did actually cost was spread among all the people subscribed to my insurance company.

This was one of the places dis-integration is visible. The person who ingests the drugs (the consumer) is not the person who chooses the drugs (the physician) is not the person who pays for the drugs (the insurance company).

There is little feedback on the negative elements of the transaction.Only the drug company knows of adverse effects — which they may or may not share. Only the drug company knows if their product is actually better than other products — but they’re not sharing that information. Only the physician knows the risk/benefit analysis of the drug — but not the cost. Only the insurance company knows what it actually costs — and they will try to encourage generics. The consumer only knows whether he or she feels better or worse, and without talking to lots of other patients, has no information with which to contextualize his or her experiences. All of them operate in a truncated information environment. None of them operate ecologically.

The other thing the consumer is thinking is of the obnoxious insurance premiums s/he has to pay. The rational thing to do for the consumer to do is to demand as expensive care as possible. After all, I just spent 6000$ per year and my employer kicked in another 6000$ per year — not only do I want the most expensive drug, I deserve it.

This then is what dis-integration looks like in health care

1. The health care system itself is the beneficiary. It is around 17% of the GDP* despite having some of the worst health outcomes of the wealthy nations. Many high prestige, high income jobs exist within the the health care system as it exists now, which might not exist in a differently organized health care system.
2. The payors are the health insurance companies, or Medicare/Medicaid. Both of these are distributed systems so that the real costs of care are only visible to some positions inside these organizations. These are the only people trying to control costs,and are making decisions about others’ care based on these cost calculations. Patients don’t like that whether it comes from government rationing or insurance pushback.
3. The social costs of our system are invisible unless you know what to look for. It will exist in those inadequate health outcomes compared to our peers, and will just look like especially troublesome disease. “Your diabetes isn’t better even though you’re following the ADA diet? Well, let’s try the next drug.” “Your cholesterol isn’t improving despite your lowfat diet?Let’s try a statin.” Or even better “you haven’t lost any weight yet, how seriously do you expect me to treat your problems?”
4. The unconscious bias might be hard to accept, until you recognize how important science and the medical system is to us. Where it may have been the case in the past that a parent wanted a child to grow up to be clergy, now every parent wants a child to grow up to be a physician. We want a pill to fix every ill. We use drugs to pep up in the morning (coffee), unwind at night (alcohol), and we do youthful rebellion through illegal drugs. Putting MD behind someone’s name automatically garners them respect in social life.

It is hard to see how much we spend and how negative our outcomes are. It may well be the case that EITHER a truly free market fee-for service system, OR a national single-payer system would be cheaper with better outcomes. As it stands we have embarrassingly bad outcomes and we spend more than everyone.

But, this doesn’t seem paradoxical if you understand that the health care system exists for its own ends, for the enrichment of the players within it. This also means that reforming this system in any way that threatens the status quo stakeholders is unlikely. I don’t know whether Obamacare is going to work or not. But it is interesting that what he has given us at this point, is more insurance. In short, the health care system does exactly what it’s meant to do. Only, you aren’t getting healthier..

* http://en.wikipedia.org/wiki/Health_care_in_the_United_States )