U.S. Health Care Reform Update: The Coming Opportunity for Entrepreneurs
U.S. Health Care Reform Update
Washington has just spent a full year attempting to revamp U.S. health care with few results, and with only a minority of Americans supporting radical change. The reason is because the majority of working (and voting) Americans are satisfied with their U.S. health care except for two items: Rising Cost and Lack of Portability. This majority wants affordable health benefits that they can keep when they change jobs, are in-between jobs, or retire early (before age 65 when they become eligible for Medicare).
Instead of listening to the majority of working, taxpaying Americans, our legislators listened mostly to lobbyists for medical providers and special interests. By December 25, 2009, the House and Senate had passed bills that would have dramatically changed health care for every American citizen, whether the citizen wanted it changed or not.
But then, just as a final, reconciled bill was being finished for the signature of the President, the majority of Americans spoke. And they spoke loudest in Massachusetts in a special election called to replace the seat of the late Senator Ted Kennedy, the original architect of U.S. health care reform. On January 19, 2010, in a Boston Tea Party heard all the way to Washington, Massachusetts elected Republican Scott Brown to the U.S. Senate, ending the supermajority the Democrats needed to pass reform without any Republican support.
Thanks to the people of Massachusetts, our legislators are now listening. The election stopped U.S. health care reform dead in its tracks. Every senator and every congressman now realizes that their seat, too, could soon be lost, unless they listen to the majority of their working constituents who don’t want any changes in their health care except for lower cost and/or increased portability.
The Coming Opportunity for Entrepreneurs
This is very exciting for entrepreneurs–because reducing the cost of medical care could soon become the greatest short-term entrepreneurial opportunity of this century.
This is because:
(1) The U.S. health care industry is our largest economic sector, exceeding $2.5 trillion annually; about 1/6 of the total economy.
(2) The cost of U.S. health care has been growing several times faster than the overall economy–from less than 5% of GDP in the 1960s to an expected 20% of GDP in 2010. If this rate of growth were to continue, the U.S. economy would be bankrupt by 2020.
(3) There is an enormous backlog of unimplemented RITs (Ready-to-be-Implemented-Technological Advances), simply “better methods”, in every area of U.S. health care. These range from the byzantine paper-based way doctors currently schedule their appointments, to their bazaar-like billing system where five different patients are charged five different wildly-varying prices with no disclosure to anyone (i.e. no transparency).
However, over the long term the greatest opportunity to reduce the cost of medical care is to implement wellness programs that prevent illness from developing in the first place.
Walk into any hospital, medical provider’s office or pharmacy and you can see immediate opportunities screaming for improvement. Just implementing a patient EMR (electronic medical record), which would give a doctor instant access to a patient’s prior medical history, could increase a doctor’s bottom line by 50%, improve the quality of care for the patient, and save our nation hundreds of billions of dollars.
This great opportunity to reduce medical cost already exists for social entrepreneurs outside the United States. The most popular operation in the United States is a simple lens replacement for a cataract. In the U.S., this operation costs about $3,500 per eye including $875 for the lens. Outside of the U.S., the world’s 63 million blind people with cataracts don’t have $35, let alone $3,500, to spend on lens replacements. To serve them and eliminate preventable blindness, Dr. Geoff Tabin and his associates profitably deliver cataract operations in Africa and Asia for $20 per eye including the $8 cost of his own lens that he manufactures in China. Read closely how he does this here in my book, and in the January 2010 National Geographic Adventure Magazine, and your mind should start churning with social and profit-making entrepreneurial opportunities to reduce medical costs.
Currently, in the U.S., there is no great immediate opportunity to reduce actual medical costs because the current U.S. health insurance system provides the opposite (“perverse”) incentives to medical providers, and has no system of transparency to even monitor costs. Thanks to the people of Massachusetts, I’m now optimistic that this will change when Congress returns to the issue of health care later this year. The cost of health care is the elephant in the room when it comes to balancing our budget and reducing our enormous deficit.
Everyone should be loudly telling their elected officials to stop pursuing their personal social agendas or caving in to lobbyists for Big Pharma and other medical providers. Washington should simply focus on what most Americans want out of U.S. health care reform:
(1) Reduced cost; and
(2) Portability–access to health insurance regardless of employment or preexisting medical conditions.
There is today an immediate opportunity for most employers and employees to significantly reduce their cost of health care, and even obtain portability–by focusing on their health insurance program and taking advantage of several tax and insurance reforms that were quietly passed in 2005-2007 but are first taking effect in 2009-2010. This is especially true because during the past year many employers and employees delayed making important decisions on their health benefits.
The implementation of these reforms answers one of the most frequent questions I’m getting today from employers: “Now that U.S. health care reform has stopped, what should we do for health benefits at our company, or for our family?”
If this subject is of interest to you, read my companion article to this blog post at ClarifyingHealth.com by clicking on the link below.