Wednesday, February 12, 2020

Bending the Healthcare Cost Curve means Cutting Jobs

You've all probably seen the charts. We spend far more in the US than other countries for healthcare.

It's been heading in the wrong direction for decades, and is getting worse.

It also isn't the best care in the world.  Other countries do better measured in many ways.  Lifespan is one of them.

And then finally, there's the growth of administrative costs in the US.

If you look at data from this Robert Wood Johnson study, you can see that Canada's administrative costs are about 15% of the US.

If we are to significantly bend the cost curve, the obvious place to go is after administrative expense.  If you consider the attention that the HL7 Da Vinci project has been getting on Prior Auth, you can see that this is definitely a pain point (even for payers).

And what does that mean?  I'm thinking it means that administrative jobs would disappear from the healthcare marketplace if done right, not providers.  Is this a bad thing?  Frankly, I don't think so.  But for those companies who primarily exist in the healthcare market to facilitate healthcare administration might have a different opinion.  After all, nobody who goes into business ever plans to get out of it.

But, that is the bottom line.  There's stuff we are spending money on in healthcare we don't need, and those who provide it will fight to keep it.


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