How to Build a Healthcare Unicorn?
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Anything else is a half-measure doomed to failure. The AMA limits how many doctors can graduate, medical schools charge enormous prices, limited supply and huge debt means doctors can command incredibly high fees, so hospitals send massive bills to insurance companies and sue the non-payers and yet remain barely solvent. Insurance companies add a profit margin and charge $10,000pp+ annual premiums to employers, who pass on some % to the employees.
Any one part of this is integrated with the whole and can't be easily fixed.
- Hospitals can't just charge less to insurance, because every part of care is so expensive.
- Care is expensive because doctors have debt to pay off, and we can't pay them less or else med-school enrollment will fall of a cliff because why rack up $400k in debt if you won't be earning 6 figures after you graduate? Not when FAANG will pay new grads $120k plus for half the school-time, and most of the students going to med school are smart+motivated enough to get those jobs.
- Insurance companies are making billions, so they aren't going anywhere anytime soon short of massive government policy shift
- Medical device and supply manufacturers make bank for the same reasons, American syringes can cost a fortune because all the prices for everything have been dialed up to 11.
On top of all of that, there's the infinitude of nitpicky soft and technical problems that would require a successful-startup's worth of effort and luck to solve, like HIPAA, coding nonsense, and many others.
Honestly sometimes it feels like the only way to "improve" the USA healthcare system really is just to pass Medicare for All and drop a bomb on the whole thing.
You mean use the system that has been used for decades in Developed countries and proven to work much better (better outcomes, cheaper, no body without coverage) ?
Yes, that would be a good idea.
Unfortunately, great American capitalism will prevail, those making the money will keep buying legislation in their favor and selling fear of change via advertising.
How does having a huge debt allow you to charge a higher fee?
Doesn’t a debt weaken your negotiating position - you have less freedom to walk away for example because you need to service your debt.
It doesn’t work that you can charge a higher fee just because you plead ‘but I have a debt!’
See also: high prices in destination shopping. The landlord sets the rent and all stores have to pay the rent, so all stores will have the same high prices no matter how stiff the competition between them.
They’re able to due to restricted supply.
Medical schools charge students a lot because doctors get paid a lot, and doctors have to be getting paid a lot to justify the enormous debts medical schools leave them with. It's a vicious circle that will never end without serious government intervention.
Doctors in Canada and Australia charge as much or more than US doctors (within the context of a universal healthcare system). This is the most absurd scapegoating. If you want to look for excessive expenditure, I encourage you to look at:
- The enormous glut of administrators including absurdly well paid CEOs which has expanded non-stop for the last 40 years.
- The absurd profit margins and profiteering by the medical insurance industry.
- The relentless rent-seeking by 'accreditation and certification' agencies like state medical licensing boards and subspecialty boards.
- And at this stage we don't even need to begin talking about pharma and device companies.
Again, a more granular analysis will point you in the direction of the layers and layers of administration and profiteering in the hospital rank and file.
Have you seen this graph?: https://investingdoc.com/the-growth-of-administrators-in-hea...
And again, very effective universal healthcare systems exist which remunerate physicians at the top end of the labour payment scale (and for good reason).
Now with nurse practitioners and other 'mid-level providers' creeping into all areas of clinical medicine, Americans are unfortunately likely to find out the hard way why appropriately remunerating people who operate on those nearest and dearest to you at their most critical times, is a good idea.
One of my co-fellows was an IV league valedictorian and national level athlete. I'm pleased and grateful someone that talented, dedicated and driven to the point of obsession is diagnosing and treating neurological disease (and not, say, improving advertising algorithms for amazon or google).
However I don't think we should limit the number of anything, if are qualified and knowledgeable enough to do brain surgery, you should be allowed to. Not just because your family was rich enough to fund education or you were willing to foot the debt. Taking less profit out of education might help fix the doctor shortage.
Unfortunately that's just not how it works. I want the best people to do brain surgery(not everyone who can), just like if I'm running a formula one racing team, I really don't want every idiot who can barely drive a car cluttering the track.
That limit exists. It is called supply and demand. There is no need to artificially limit this, if other people want to enter the market.
1) That point is written very clearly just below the graph by the author.
2) It doesn't fundamentally change the argument. The rate of increase in the number of administrators has significantly outpaced the increase in physician numbers as costs have increased.
The problem with this line of thought is sometimes patients arrive that look like they have routine conditions (ear infection) which turn out to be not so routine (otitis media with encephalitis or a nasopharyngeal carcinoma). Or do you think NPs know a lot about sub-speciality presentations based on their two years of training?
People forget that physicians are the actual expertise in the hospital (there's a reason its 4 years med school plus a residency plus fellowships).
I think treating mid-level providers as corporate BS is very reductive and both underestimates these healthcare workers and overestimates physicians.
So Canadian doctors order whatever tests they are allowed and don't order tests you actually need. It is 1000% easier to get a cat scan than an mri even when an mri would provide more details in certain cases.
If they are allowed a certain test than they will say it's extremely important. If you point out other tests that could helpful those ideas are not well received.
The whole thing has become some strange lineitem exercises where doctors are gaming the system because the government keeps changing the rules to pay them less so they find ways to fight back.
There was a strange case where a doctor would give patients a drug to induce labour and give birth early. This allowed them to get over the quota of deliveries per month but there was a rule if the patient gave birth early they could go over the quota. After hundreds of early births the death rate was much higher for this one doctor.. this doctor was working for his own interests.
It also allowed him to bill for Saturday deliveries which paid a higher rate. The story is well worth a read for anyone who missed it.
Edit: This article[1] just provides a summary. This article[2] was the original investigative reporting.
[1] https://www.thecut.com/2019/07/paul-shuen-toronto-medical-ma...
[2] https://torontolife.com/city/greed-betrayal-medical-miscondu...
[1] https://journal.practicelink.com/vital-stats/physician-compe...
Saying they are unnecessary would be a misunderstanding of our current system. But to say our current system can be altered to render insurance as we know it today unnecessary is a different thing.
If that is the case, thr only way you can increase profits is to be ok with ridiculous pricing you keep getting...
My personal anectode is a genetic tests done for pregnant ladies. Natera, iirc, charged something like 8k$. I asked for cash price they said 230$. Go figure
As an European, I'd say that patients don't enter the health care system as consumers. You don't consume a stent because it's hip among friends. Also, you shouldn't get some medical treatment or not because you can afford it or not.
The article starts talking about patients but ends with consumers. Now, let's find the error.
Have fun storming the castle!
The basic problem to solve in healthcare is identity for physicians, patients, circle of care, and all the service providers in between. Privacy is the effect of that. The reason it's important is that dis-intermediation is only possible when you solve this problem. Every other solution is sustaining the business models of ensconced players, which just perpetuates how broken the system is, which is what makes it look like the graveyard of empires.
A lot of companies and individuals make a lot of money in the current system. They have no interest in changes. What does "solving" mean? Usually companies want to make money so the problem actually has been "solved". A lot.
The U.S. healthcare system does not resemble any other system in the world because it's an anomaly of perverse incentives and protectionism. It's unreasonable to ask any serious person to provide a moral defence of it, but in terms of investments, there are no sustainable multi-billion dollar startups that support the status quo because the status quo is an artifact of legislative market distortions. There is no growth in the current system. Unless you fundamentally break it, the upside isn't interesting.
0. http://www.econtalk.org/keith-smith-on-free-market-health-ca...
Before I left the industry I saw many dropping third party analytics and building their own solutions in need of more m&a dollars from declining membership nationally.
Information wants to be free so much that it leaks!
Given experian experiance, I would prefer the option to keep a thumbdrive with me. If I lose it? My fault. Exams can be redone. Printouts can be provided. But you can't fix a leak.
I accept all the risk. But there is no freedom to do that - leaving the thumbdrive aside, by just bringing papers that I would keep - not them.
Also with most lab work being done by quest & labcorp, I think that is pretty close to being portable for the %80 case too.
I think this is what apple health is also trying to do.
It won't be easy to get traction because actually eating better and exercising etc get dismissed as "not really healthcare." Nevermind that study after study after study say diet and exercise play huge roles in many deadly medical issues, including heart disease and cancer.
It's vastly easier to get traction with insanely expensive orphan drugs (drugs for so-called orphan diseases) and organ transplants. If you have certain conditions, people are vastly happier to turn you into Frankenstein than to preserve the function of the organs you were born with.
It also is tough to become a unicorn. Stuff that actually gets you heathier tends to drive health-related expenses down. People looking to get rich quick hate that. This is part of why utterly insanely priced drugs and surgeries have so much more traction.