Scott MacStravic, Ph.D.
The compelling discussion of our country’s “bang for the buck” from medical care, recently published in the New England Journal of Medicine, concluded that we are getting a good bargain. On average, we spent $19,900 on medical care for each extra year of life expectancy gained in the last four decades of the 20th century. I have never seen anyone argue persuasively that an extra year of life is not worth that much.
On the other hand, the average hides some less persuasive cost figures. During the 1990s, the average cost had risen to $36,300 per added year of life. And for seniors 65+, each added year of life cost $145,000, often due to futile end-of-life care due to medicine’s persistent focus on diagnosis and cure vs. treating end of life as an inevitable and manageable life experience.
But the conclusion is not the right one in the first place, because it judged the current medical and hospital care system as it is, not against any other ways to spend the same money it costs us to maintain it. The real question should be: how does the return on investment that we have been getting with the current medical/hospital care system compare to what we might have gained had we invested in a more concerted and coordinated effort to reduce the need for medical care in the first place.
The entire system, including not merely hospitals and physicians providing care, but the employers, insurers and government agencies who pay for it, as well as the three hundred million patients who pay for it have myopically focused on reactive sickness care, rather than balancing their investments with proactive health care. This short-term and narrow focus has put the system in the status of handling crises continuously, without seeking to alter their causes and frequency.
In the 21st century where we are now, a lot of the system’s stakeholders have begun asking questions about causes, and investing in proactive efforts to reduce the incidence and prevalence of disease, now growing dramatically. Commercial insurers have somewhat logically been myopic, since they keep their members too short a time to gain long-term returns, but have at least worked on managing chronic diseases better, to reduce the crises, complications and worsening thereof.
Government agencies, primarily Medicare and Medicaid, have begun to look at disease management, and even disease risk reduction, as with paying for smoking cessation, for example. Employers have recently caught on to the dramatic reductions in labor costs they can achieve through empowering their employees and even dependents to become or remain healthier. Even some consumers have started to look at investments of their own Health Savings Accounts into proactive health in order to avoid reactive sickness expenses.
Perhaps most surprising is the fact that growing numbers of physicians and hospitals are engaging in proactive health efforts, even though these, by definition, reduce reactive sickness care revenue. Many start by using proactive health programs to reduce their own labor costs and cope better with labor shortages. But many are finding that, if they select the right customers, the right methods, right costs, and right payment schemes, they can make money at it as well.
If we only focus on whether or not our current investments in reactive sickness care are paying off, we can probably conclude that they still do for many decades to come. But unless and until we recognize the competing option of investing now in proactive health in order to get the same or better returns in the long run, we will never achieve the full potential of our illogically labeled “healthcare” system.
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