One of the many things I learned during my wife’s cancer treatment is that healthcare is designed with the cost development systems insulated to resist external influence. There is little accountability for the base cost architecture, often to the point where no one can identify the architect. This makes addressing inefficiencies, exploitations, and shortcomings almost impossible.
From a regulatory standpoint, legislative action has little to target. The doctor, the technicians, the hospital, the supply vendor, the pharmacist, and even the insurers rarely set their own prices. Between every transaction there is at least one middleman who manages the cost and often their pricing guidelines are set by yet another middleman. The structure eliminates the cash flow variable from the parties in direct patient contact and leaves only the profit component as a variable. This undermines free market cost controls and performance incentives.
For hypothetical example, a hospital billing for a $10000 procedure does not receive that $10000. Third, fourth, or fifth parties receive the money and redistribute it back to everyone in the chain. That means the hospital is left with a negotiable amount of just $600 (above the line, $200 below). This phenomenally granular disintermediation of the cost structure means no party has a vested interest in individual transactions. There’s simply not enough money at that level to invest in higher stakes negotiations one might expect in a $10000 transaction. This makes volume the success defining metric.
As I was spending countless days in hospital over the course of a year, I started counting keystrokes and mouse clicks performed by various hospital staff. Roughly 60% of all computer interaction was performed solely for billing purposes, not patient care. Billing purposes are also the primary driver in wait times. The doctors review patient records before each visit and spend much of that time reviewing what treatments they are allowed to use based on the patient’s financial means and their insurer. The highest performing doctors (a volume metric) are the ones who memorize the treatment approval criteria and don’t have to refer to the computer as often.
The scope of the disintermediation is vast, so more examples are not useful. At the end of the day, what it boils down to is that the individual parties involved in the minutiae of patient care are insulated from each other. This makes YIMBY activism ineffective because enacting change that way only affects one tiny group within the chain and everyone else adjusts to compensate. It’s like trying to eat Jello with a cooked noodle. Huge effort with little to no reward.
I do not have any reasonable solution. Americans have proven time and time again that adopting healthcare like developed countries have is unacceptable. The focus has to change to actual healthcare where patient outcomes are important (as opposed to focusing on billing outcomes for providers). Increased frequency of Luigi Lobbying is unreasonable, but I think more people are beginning to see it as justified.
One of the many things I learned during my wife’s cancer treatment is that healthcare is designed with the cost development systems insulated to resist external influence. There is little accountability for the base cost architecture, often to the point where no one can identify the architect.
This makes addressing inefficiencies, exploitations, and shortcomings almost impossible.
From a regulatory standpoint, legislative action has little to target. The doctor, the technicians, the hospital, the supply vendor, the pharmacist, and even the insurers rarely set their own prices. Between every transaction there is at least one middleman who manages the cost and often their pricing guidelines are set by yet another middleman. The structure eliminates the cash flow variable from the parties in direct patient contact and leaves only the profit component as a variable. This undermines free market cost controls and performance incentives.
For hypothetical example, a hospital billing for a $10000 procedure does not receive that $10000. Third, fourth, or fifth parties receive the money and redistribute it back to everyone in the chain. That means the hospital is left with a negotiable amount of just $600 (above the line, $200 below). This phenomenally granular disintermediation of the cost structure means no party has a vested interest in individual transactions. There’s simply not enough money at that level to invest in higher stakes negotiations one might expect in a $10000 transaction. This makes volume the success defining metric.
As I was spending countless days in hospital over the course of a year, I started counting keystrokes and mouse clicks performed by various hospital staff. Roughly 60% of all computer interaction was performed solely for billing purposes, not patient care. Billing purposes are also the primary driver in wait times. The doctors review patient records before each visit and spend much of that time reviewing what treatments they are allowed to use based on the patient’s financial means and their insurer. The highest performing doctors (a volume metric) are the ones who memorize the treatment approval criteria and don’t have to refer to the computer as often.
The scope of the disintermediation is vast, so more examples are not useful. At the end of the day, what it boils down to is that the individual parties involved in the minutiae of patient care are insulated from each other. This makes YIMBY activism ineffective because enacting change that way only affects one tiny group within the chain and everyone else adjusts to compensate. It’s like trying to eat Jello with a cooked noodle. Huge effort with little to no reward.
I do not have any reasonable solution. Americans have proven time and time again that adopting healthcare like developed countries have is unacceptable. The focus has to change to actual healthcare where patient outcomes are important (as opposed to focusing on billing outcomes for providers). Increased frequency of Luigi Lobbying is unreasonable, but I think more people are beginning to see it as justified.