Scaling and Healthcare
The biggest hurdle to high quality, low-cost healthcare should be a familiar one to web developers.
Note: At this point, I anticipate this reasonable objection: “Dan, you know nothing about web development or medicine. You don’t even know what a web developer does. A JD is like the Fredo Corleone of doctoral degrees. You’re out of your league. Go home, kid.
The problem is one of scaling. Somewhat counterintuitively, more spending on healthcare does not increase the quality of care provided. We have models like the Mayo clinic and a number of others that offer the best care in the world in a remarkably affordable manner. The Mayo Clinic has even been able to set up some satallite campuses in Florida, the most expensive healthcare market in the country, and achieved similar low-cost, high-quality care. There are a few clues to its success. It is a not-for-profit. It has put doctors on salary, thereby removing incentives to overtreat. But the biggest thing it has going for it is being the Mayo Clinic. So the proposal of making every hospital like the Mayo clinic is sort of like making every basketball player like Michael Jordan or every school into the most enviably successful charter schools. Sure, it could be kind of awesome. But that cookie-cutter model we know is great at making McDonalds but not so great at making that deli you love which makes the best and most affordable sandwiches and everybody knows your name and they play music that doesn’t suck.
This is the reason I don’t think Jay Parkinson M.D.’s proposal for fixing healthcare will work. Here it is, in part:
There is a better way. Foster new business models of healthcare delivery. Act like a VC fund (or the US military) who has a few hundred billion to lose knowing that one of your investments will absolutely nail it and provide cost-effective care for the American people at scale. Gamble. Take chances. That’s the only way to succeed. Get the dinosaurs out of the playing field. Don’t ask the dinosaurs for their advice. Don’t ask them to fix the problem. You can’t ask the newspapers to invent Craigslist.The goal should be to disrupt the current players, get them out of the way, and do things differently and better.
It’s that at scale part that seems so tricky. Can we create anything that is both innovative and at ne necessary scale? We’re having trouble creating an at scale Western-style democracy in Iraq. If you’ve read The Omnivore’s Dilema, you’re familiar with Polyface Farm, which manages to do quite well, both in terms of costs and yields, but uses a model that requires the sort of intense local knowledge that cannot be mass-produced. I don’t think medicine is any different.
The private insurers may very well be dinosaurs. But they have one important advantage over some of the hypothetical alternatives. They exist. At the moment, that counts for a lot. Is there a way to encourage successful, more local models to flourish while improving conditions nationally? I don’t think we can simply sweep aside the dinosaurs. We have nothing to replace them with.
