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Here's a statistic which I think every American should know: 1/6th of the American economy is devoted to healthcare [1]. The purpose of sharing this number is for us all to think about scale. It's a big country, and if 1 out of 6 dollars in the country is going to our health, that's a big chunk of our spending.

But that money is complicated. It's money that we consumers shell out on prescriptions and visits to the doctor; urgent care runs and bandages. It's the cost of insurance premiums. It's the salary to pay paramedics and the gasoline for their ambulances. And the cash also goes to research and development, to training and recruitment, to marketing and sales. The healthcare system is an enormous modern human institution. If the healthcare system was a living creature, the thing that circulates through its arteries and veins we would call money.

This is all to say that healthcare is both complicated and expensive. To make it simpler and less costly is hard. There is no easy answer to this problem, not the least of which is the myth of universal healthcare. But there are things we can do. And if we pursue them honestly and carefully, I believe we can begin to make a difference.

Parts of a Whole

Let's think of healthcare as a collection of gigantic moving pieces. I can think of four separate categories of institutions that interact to form the entirety of healthcare:

  • Point-of-care facilities: Hospitals, Clinics, Pharmacies, Assisted Living, and Urgent Care
  • Financial services: Insurers, Cost-Sharing Programs, Pharmacy Benefit Managers, Third-Party Administrators
  • Education and Research: Pharmaceutical Companies, Medical schools, Medical training programs
  • Government operations: National and Regional Public Health Services, Industry Regulators

That list is not comprehensive. But at one point or another, you're likely to benefit from (or be frustrated by) several of these bureaucracies. Knowing that they all fit together, however imperfectly, is a first step to making meaningful change. And it's also an opportunity to better understand how we can make a difference.

Example: There are about 5,000 community hospitals in the U.S. About half of them are non-profit, about a third are investor-owned and for-profit, and the rest are owned by state and local governments. I don't know which of these models are the best–non-profit, for-profit, or government-owned–but that there are three types does add more complexity [2].

Whatever the part of the system you're experiencing that creates issues (long waits in an doctor's office, billing inconsistencies with an insurer, expensive drugs at the pharmacy) it is only one part of the system. And if we're going to do anything, we have do so systematically.

Understanding Costs

The spending required to own a car is lumpy. You might have a big up-front cost to buy the car, or you might have monthly payments. You will put gas into it every few weeks and change the oil once every few months. And then you'll have big repairs that may run to the thousands of dollars (typically at the least convenient time possible.)

Healthcare is the same, only worse. It is exceptionally difficult to predict how much it will cost to maintain the vehicle that is your body. There are some proactive steps you can take, naturally, such as quality fuel, regular checkups, and ongoing exercise. But you never know when you'll have a crisis that requires significant resources, almost all at once.

Example: Going to the ICU is one of the most expensive parts of healthcare. It can be as high as $10,000 in the first day, and is rarely less than $1,000 a day [3]. For patients who are otherwise healthy and young, intensive care units are effective, but for people who are 80+ years old about 40% will die before they leave the hospital [4]. This is not a new phenomenon [5].

The reason healthcare is expensive is because we are trying to do everything we can. People are living longer with chronic conditions and being saved from threats that would have been hopeless at any other point in history.

But it is also expensive because we *are not doing everything we can.* If we all took better care of ourselves, healthcare would be less expensive for all of us.

This is where the money goes. And if we want to spend less of it, we have to decide what we're not going to do as well as what we are going to start doing.

Making Comparisons

The biggest temptation when it comes to healthcare may be to attempt to draw comparisons. And to be fair, conducting detailed studies of people who one receive treatment versus another is at the core of modern medicine. We are constantly looking at control groups, placebo groups, and experimental groups. We are checking to see if one facility or tactic is outperforming another.

But this analysis is hard. The entire U.S. healthcare system cannot be easily compared, with say, another country. We operate differently. We fund differently. We provide different levels of service (some worse, some better.) And most importantly, we are not alone. Research and education done here helps people elsewhere. In fact, even though the U.S. has only 5% of the world's population, we make up about 50% of R&D spending for the world [6].

There are lessons to learn from other places and other approaches, and lessons to share. But whole scale, off-hand comments are not helpful nor are they accurate.

We can't really compare the whole thing to anything else. Because there is nothing quite like the American healthcare system, anywhere in the world.


[2] There are actually more than three types, this is only an approximation.



[5] An 1984 article outlines the $47,311.20 bill of a Mrs. K_, who died over the course of 26 days in the ICU. Edward Tufte used this in his book Envisioning Information: page 1 page 2


healthcare.txt · Last modified: 2021/12/17 19:54 by rslaughter