The Key to Simplifying U.S. Healthcare Reform

Mar 6, 2018

Dan Tasset is the founder, Executive Chairman and CEO of NueHealth. His blog posts offer his experienced and innovative views on healthcare, healthcare reform, and related topics.

So much is being written on the status of the United States healthcare system. Unfortunately, most of the discussion is about how to lower the cost of health insurance. Very few are discussing how to lower the cost of health CARE.

More importantly, we should be debating not just how to lower the cost of healthcare but how to improve the value delivered to the consumer. Value equals clinical quality plus patient satisfaction divided by cost. Everyone in healthcare should be focused on improving value. Payers, providers, patients and tech companies should all have this as their number one goal.

In order to speed along healthcare reform we need to start with the patient. We need for the patient to care about total value, which not only includes the experience and clinical outcomes but also cost. Certainly one way to do this is through high deductible and high copay insurance plans which are now proliferating throughout the country. If the cost of care impacts the amount the patient is responsible for then the patient will care about cost. This is the way it works in almost every other industry and with almost every other product or service. It’s called consumerism. The customer cares about total value which includes cost.

Next, if the patient becomes a true consumer, then the providers of healthcare will begin to compete on total value. Meaning they will compete not only on patient satisfaction, convenience and clinical outcomes but they’ll also have to compete based on cost. Sounds logical, right? But in today’s healthcare environment there is little to no competition based on cost. Subsequently there is little effort by providers to become more efficient and less wasteful. Again, if the patient cares about cost the providers will compete on cost.

Finally, competition breeds innovation. Innovation will be a key element in developing a healthcare system that produces a higher value to the patient. And it will be THE key element in lower costs.

There you have it! Healthcare reform simplified. CONSUMERISM (having the patient care about cost) which leads to COMPETITION which sparks INNOVATION. Our federal and state governments, providers, insurance companies, employers and patients should all be working toward these basic change fundamentals. In future blogs I’ll discuss the responsibility and role of each in healthcare reform.