Dr. John Goodman of the Goodman Institute for Public Policy Research joins us for an insightful conversation on healthcare economics, which he states virtually no one understands because of its complexity and disconnect from normal market forces. He submits that one cannot approach healthcare delivery with supply and demand curves, so instead, he focuses on incentives. Indeed, in his acclaimed 2012 book entitled "Priceless - Curing The Healthcare Crisis," he suggests that our current system begs the wrong question, e.g., "How can I [the provider, hospital administrator, etc] squeeze more money out of the payment formula today?" Clinicians should be asking, "How can I make my service better, less costly, and more accessible to patients today?" And so, his focus is on creating good incentives as a solution to many of the issues we face.
Dr. Goodman further explains how the suppression of normal market processes has not helped any of us, be it physicians or patients. He suggests that we are really no different from the Canadians or Europeans because we have been enamored by the idea that no one should have to choose between healthcare and other uses of money. Underscoring all of this is the notion that we primarily pay for healthcare with time and not money. We are, in essence, paying only a fraction of an inflated price since employers or the government typically pick up a majority of the tab either via direct payment for premiums or via subsidies or Medicare, etc. We ultimately have a bureaucratic system in play that not only suppresses pricing information but also creates these non-market barriers to care, such as waiting times and an endless myriad of rules and regulations that impede the delivery of care.
Gayle Brekke, PhD, and I discuss the success of telehealth initiatives ushered in under the Trump administration and other efforts to deregulate the industry, which highlight how market forces can fulfill a market need – although it took tremendous political will to make these changes.
Despite these wins, we must contend with entrenched beliefs and existing stakeholders for whom vested interests often stifle innovation. Indeed, the politics of medicine have constructed a system that mirrors the British National Health Service in many ways. The focus is to spend money on healthy people. In Britain, seeing a physician is quite easy, but if you need diagnostics and specialty services, you will likely encounter long waiting lines and denied care. Here, stateside, we are facing the same pressures. Case in point - ACA plans are not accepted at some of our nation's leading centers, such as the Mayo Clinic, MD Anderson, Cleveland Clinic, or UTSW, to name a few. It’s ultimately a race to the bottom. What we largely have for insurance is high deductible Medicaid for the worried well.
Dr. Goodman is concerned that we lack the political will to reform the system, which is unfortunate given some of his ideas on best addressing and financing care for the chronically ill and more. He discusses some of the lessons we can learn from Medicare Advantage plans, which allow for risk adjustment – so physicians actually get paid more per visit with higher acuity patients. He would like to see the role of HSA accounts expand and highlights Medicaid's Cash and Counsel program for the homebound disabled. They are actually given accounts and can choose who will provide their care. It puts control into the hands of the disabled, who are incentivized to use their dollars wisely. The program has a satisfaction rating of 90%.
As we continue to discuss and think about ways to improve healthcare delivery in the U.S., Dr. Goodman advocates for market solutions, such as Direct Primary Care.
You can order his newest book, "New Way to Care: Social Protections that Put Families First,” by visiting goodmaninstitute.org.
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