The concept of supply and demand is the cornerstone of economic theory. For simple commodities, the theory predicts that the demand for a product decreases as the price of the product increases and consumers are unwilling to pay the higher price. The supply increases as the price increases and suppliers increase production to capture increased profits. The actual price of the product is a compromise between the desires of consumers and the acumen of suppliers.
Tag: healthcare spend
Two Visions for Healthcare
It is clear that the U.S. cannot continue its current course in which healthcare costs are more than 17% of GDP and outcomes are significantly behind the rest of the world. It is also clear that Americans are an optimistic people with a firm belief in the idea of progress, which manifests itself in technological and business innovation. The two visions for healthcare that were presented at the Forbes Healthcare Summit are almost caricatures, however. There is opportunity for creative individuals and institutions. Technology has not been applied evenly in healthcare. While the U.S. can be proud of its innovations in high-technology procedures, its adoption of information technology is not even at the level of the pizza industry. Both visions emerged as a result of economic incentives, one to increase revenue, as was the case in Texas, and one to reduce costs, as was the case in upstate New York. The question now is how do we shift the incentives to create the proper mix of outcomes, cost, and risk?
US Healthcare as a Complex System
Healthcare in the U.S. is complicated. There are dozens of components: hospitals, hospices, assisted living facilities, nursing homes, home care, pharmacies, pharmaceutical companies, the Food and Drug Administration, the Patent Office, specialized physicians, general physicians, physicians assistants, nurses, medical device manufacturers, Medicare, Medicaid, private insurers, self insurers, employers, self-employed, wellness centers, chronic conditions, acute conditions, end-of-life conditions, rare diseases, personalized medicine, cosmetic surgery, concierge medicine, and many more. The complication is impossible for any single person to penetrate or understand.