Everyone complains about health care, but the real problem is healthcare. As two words, health care is a service offered by trained professionals to people known as patients. As one word, healthcare means the system in which the professionals work and where patients receive care.
The healthcare system is broken. It doesn’t work because healthcare still thinks like the 19th century, but we live in the 21st.
In the 19th century, there was a direct relationship between the doctor and the patient. The doctor delivered both the baby and the bill. The patient received the new child and paid the doctor for his services.
Today, health care is provided by a team. When I asked my mother-in-law who was her doctor, she responded, “Northwestern University Hospital.” She could not identify an individual with a name.
Patients do not pay their bills today. Insurance policies – via private companies or government agencies – pay our medical bills. The lack of a direct, fiduciary relationship between doctor and patient prevents the free market from functioning.
Micro-economic disconnection shows how separating or “disconnecting” supply and demand – the free market forces – produces an ever-rising, unsupportable cost spiral. Because the patient doesn’t pay the bill, he or she has no reason to economize. Because the doctor wants “everything done,” and knows that insurance is paying the bill, the doctor has no incentive to economize. The insurance company certainly does economize. Under the current system, they make money by not spending it, so they deny or delay our medical care.
The phrase “moral hazard” describes how freely we spend money when it is not our own. We have no hesitation going to the Emergency Room – spending $500- for our child with a fever instead of going to the pediatrician and spending $40. Because of the moral hazard, it makes no difference to our wallets so why should we economize?
Harmful consequences of disconnection extend well beyond money. Many people use the word fiduciary to refer solely to financial relationships. However, a fiduciary is someone who temporarily accepts power or authority from one person to use for the benefit of that person. A patient gives power to the doctor – in the role as fiduciary – to cut the patient open and operate. If any other person did what the doctor does, it would be classified as attempted murder.
In today’s disconnected (patient-to-doctor) world of medical teams, third party payers and malpractice lawyers, the fiduciary relationship is gone and with it went our faith in doctors. Though today’s doctors can do so much more for patients than doctors could in the 19th century, we no longer trust them. They have fallen from God, passed through fiduciary and are now approaching “perp” (perpetrator) status.
Nineteenth century scientists developed laws or rules in physics, chemistry and mechanics. They could precisely predict events like where a planet would be or how much bicarbonate we get each time when we add H20 to CO2. As medical capabilities dramatically improved over the years, patients continued to expect the same degree of predictability in medicine as in physics or math. We thought they could guarantee a specific outcome to a specific patient.
In the 20th century, Werner Heisenberg enunciated the uncertainty principle and showed that we couldn’t predict or guarantee anything at all. Nevertheless, healthcare stayed with Newton’s mechanical predictable world. Today, instead of accepting a bad medical outcome as misfortune, unavoidable human error or limitations on medical knowledge, healthcare blames the doctor, cementing his or her 21st century status as a perp.
In the 19th century, the highest measure of success was efficiency. The quicker and cheaper you did something, the better the result. The person who makes the most widgets during the workday is the best. So today, if the best doctor is the most efficient, then the best doctor sees the most patients per day and therefore spends the least time with each patient. But wait! That is not right. That is not what patients want nor is it the way to practice high quality medicine.
Right now, my hospital expects me to be efficient, meaning that I see 4.2 patients per hour. This translated to 14 minutes per patient, seven of which are consumed with paperwork. This is how 19th century thinking produces what are called perverse incentives. The system rewards the very behaviors we don’t want.
If you want a healthcare system that works, drag it up from the 19th century into the 21st.