The Solution

Is health care broken?

• Health care expenditure continues in unabated growth
• Health care now fastest growing component for employers

How can health care be fixed?

Talus Healthcare Exchange founding partner, Dr. Lorin Brandon, has given considerable thought to the healthcare problem. The following article sheds light on this very important topic.

Health Care Crisis: Focus is on the Wrong 'C'

By Lorin Brandon, DPM

It’s no secret health care in the United States is in a full-blown crisis. As the January 16, 2007 editorial section of the USA Today put it, “the list of what’s wrong with American health care is sickeningly long and increasingly familiar to millions.” That is a well-accepted fact. It may not be publicized to the extent that another crisis would be but that is a result of the lack of solutions and should not be read as an indication of a minor crisis. Politicians are starting to get it and they are beginning to take this head on. Newt Gingrich and Dick Lamm have written books and proposed solutions. Any politician running for office has a platform on health care reform if they want to be taken seriously. More recently Mitt Romney and Arnold Schwarzenegger are taking this problem to their state legislators and they have crafted what amounts to universal coverage policy proposals for their respective states. In the continued debate on the editorial pages of USA Today, the Massachusetts and California proposals were critiqued by both liberal and conservative experts. Predictably both sides had opposition to the plans with the liberals arguing that the proposals don’t go far enough and conservatives arguing that mandating coverage will require insurance plans to raise prices. Obviously argument can be made why both sides are either right or wrong, but more importantly the proposals and the respective sides of the aisle are not focusing on the real issue. It’s not about Coverage, it’s about Cost.

All health care reform attempts to date may seem valiant and are probably to be praised but ironically they focus on the wrong area. Our politicians are focusing on health care “coverage” when they should be focusing on health care “costs”. Schwarzenegger has argued that cost savings can be achieved only when everyone has coverage so that the healthy join insurance pools along with the chronically ill. This is an oft repeated fallacy and nothing could be further from the truth which demonstrates how little our leaders understand the real problem. Our health care crisis is the outcome of excessive cost increases, ultimately resulting in the reduction in overall coverage. To focus on increasing health care coverage will only exacerbate the problem and that is a historical fact. Common sense alone is enough to prove this point, but it can certainly be supported with actual facts. In 1940 there were very few third party payers that existed and health care was accessible, fairly inexpensive and it only cost the United States 4.5% of the overall GDP. Health care coverage (i.e.-third party payers) came onto the scene in the 1940’s and Medicare and Medicaid were developed in the 1960’s. Whether it has been private health insurance or public health care coverage does not matter, excessive inflation is the ultimate source of the problem. Health care averages double digit inflation annually and the United States now spends $2 trillion per year on health care representing 16% of our GDP. Those are unacceptable numbers and they have to change.

Before you jump to conclusions about where this is headed let me hasten to inform you that I am not opposed to health care coverage and I believe that health insurance should be affordable and accessible, but it has to be done in the right way or the problem will continue to escalate. I have studied health care in the United States as well as Canada and European countries where universal health care exists. Excessive inflation is present in both systems and all countries continue to look for that elusive health care solution. This ought to tell us something, particularly that the main focus in correcting the problem must be on Cost. This may sound difficult but it is not. Health care is considered by most people to be a service and while this may be true, health care is has also become a commodity. It has become a commodity through complex billing processes that are universal to the health care industry and recognition of this fact has the potential to benefit all parties. Health care can be traded over an open market like all other commodities are traded and this could solve the excessive inflation problems that are inherent to the health care market. Solve the cost problem and you also solve the coverage problem because now companies and individuals can afford the coverage. Reverse the trend of health care inflation and you reverse the trend of more and more uninsured and underinsured. To do otherwise is to only deepen our already sickened health care system. Let’s focus on the correct “C” and that is Cost or even Commodities, not Coverage. It works for many other major industries and it can work for the health care industry as well.

Lorin Brandon is a Physician in Fort Morgan, Colorado and the Founding Partner of Talus, LLC.