The United States spends $3.2 trillion on healthcare each year, more than any other country in the world. Dr. Sanjay Gupta, CNN’s Chief Medical Correspondent, was recently featured in a CNN Health video that explains why healthcare in the United States is so costly. His high-level analysis of the ecosystem broke healthcare costs into these five categories:
- Pharmaceutical Prices – the prices of our prescription drugs are set by the drug manufacturers. With the occasional exception of the VA and Medicaid, the prices of these drugs are non-negotiable.
- Administrative Costs – We see this more than any other offense as a medical record audit and advisory company. The US healthcare system’s billing is so intricate and complex, that more jobs needed to be created to simply navigate through the myriad of medical codes, insurance policies, co-plans, and regulatory requirements.
- Specialist Visits – Many patients are referred to specialists. These physicians are costlier than a general practitioner. This is a divergence from healthcare in other countries where general practitioners are usually equipped to handle some specialized ailments.
- Defensive Medicine – This one takes the phrase “If it wasn’t documented, it wasn’t done” to a whole new level. Instead of over-documenting, some doctors are over-performing. This means that they’ll order superfluous tests or use diagnostic tools that aren’t necessarily medically necessary to protect themselves against claims like negligence in the event of a lawsuit.
- Sickly Population – The United States has unfortunately become notorious for having a…large population. As obesity rises, so do disease rates. The sicker the population, the more expensive the care.
Advize Health is committed to the overall reduction of healthcare costs. Even though we’ve addressed issues such as health and fitness through YogAuditing, our true focus lies within the network of problems related to administrative costs, as well as fraud, waste, and abuse.
But Advize isn’t the only organization working towards a more healthy, cost-effective future.
According to Dr. Phil Smith, MD, president of MedMorph LLC:
Two studies in 2012 placed healthcare fraud, waste and abuse at 20-30% of the total cost of U.S. healthcare. [1],[2]. That is money that we could better use for the health of our citizens. There is also an increased regulatory burden on physicians and hospitals, leading to confusion and financial risks to practices and healthcare systems.
Dr. Smith launched a new website last year, HealthITAccelerator.com to help educate physicians, health IT professionals and others in healthcare on topics such as Population Health, Optimizing Electronic Health Records and Medication Safety. This includes a free e-book, Med Wreck: Proposing a Solution for the Nightmare of Medication Reconciliation that exposes the medication issues in healthcare and proposes a solution.
Companies and executives from companies of all sizes are taking notice of the deep well of need in healthcare.
Jeff Bezos (Amazon), Warren Buffett (Berkshire Hathaway), and Jamie Dimon (JPMorgan Chase) are getting into the insurance business. The three companies have nearly one million international employees collectively, are focusing on their domestic employees to create a product that provides coverage to them and their families.
“The ballooning costs of health care act as a hungry tapeworm on the American economy…We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.
Warren Buffett
The three men have been praised for their ability to think long-term, a skill that will serve them well in the endeavors, considering the unremarkable rates of change in the healthcare industry. The combined resources of each organization could affect change in the future. Considering the risk of using their own organizations as an incubator for this experiment, starting “small” and branching out may be the most strategic way to ease healthcare’s burden on the economy.
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