Health Care or the Economy?


We've reached the point of healthcare cost unsustainability, so simply slowing the rate of healthcare cost growth won't get us out of the problem.

We don't have any wiggle room. We don't have any margin. We're using up all the resources that we can spend elsewhere in society. So that's why I say, let's not use the phrase bending the cost curve. We have to break the cost curve. Slowing it down is not sufficient. If healthcare costs were only growing at 2% which would be historically amazing, but the economy was only growing at 1%, then healthcare costs are still growing twice as fast as economic expansion.

So instead of thinking about slowing healthcare cost growth and thinking that's wonderful, we have to get healthcare cost growth to a level where it's equal to or less than the rate of economic expansion. Otherwise, we're simply slowing the rate of the problem.

What we've been talking about for years is now happening. The problem was that it was always something that would happen in the future, and so, as a result, we kept marching toward the day of reckoning, and we're at the day of reckoning now. The last recession was very much healthcare related, and we are in a very tenuous situation where if we keep spending more that it runs the risk of not just destabilizing the economy but destroying it. Everyone recognizes that now.

Healthcare is always at the base of the issue. We cannot address this without addressing healthcare. You cannot address the deficit without addressing healthcare. You cannot address the aging of the American population without addressing healthcare. You cannot address American competitiveness without addressing healthcare. We've reached a point where no one can afford healthcare.

The federal government can't afford it. The state governments cannot afford it. Businesses cannot afford it. People cannot afford it. You can make the arguments, yes, but we're taking care of poor people or sick people. And that's cool, but the problem is the markets don't care about that. Markets are agglomerations of people, and what people say is, "Where can I get the product I want at the best cost? At the lowest price that's got the value that I need."

The other thing that you have to think about is we've got the most expensive healthcare system in the world, but we don't have the best healthcare system in the world. So wait a minute, we're spending 18.2% of our economy on healthcare. It's incredibly expensive. It's the number one cause of personal bankruptcy in the United States. It's destroying state and federal budgets. We're not getting value for the dollar, and we're killing and injuring lots of people? So there's the case for change.

So you're seeing as a result, decreases in utilization precisely because of that, and that's the indication that the market is reforming the healthcare system. We need to be able to respond to that by demonstrating value, by providing safe, efficient care, by giving good information to patients so that they can make informed decisions, and not just being this black box of opacity which is based on a "Trust me. We're good" and "Don't worry how much it's going to cost because your insurance will pay for it."