Tyler’s Toolbox

The sub-title to this piece is “Patient-Advocates as Harbringers of Hope in the Health Care System.”

Disclaimer: I am a Libertarian-Progressive. I generally trust markets more than I trust government, primarily because I think it’s easier to inspire real change and harder to make massive mistakes in the free market — however I think government must harness the power of markets and put bumper-rails in to protect the masses from greed overdoses. I supported Barack Obama in the 2008 election and continue to do so. In advance of his healthcare speech, and at the tail-end of a lengthy vacation where I discussed my views, I decided to pen the following missive.

This post is about 1250 words, if, like most, you are far too lazy to read something of that length, here’s a good summary:  

Today, doctors are manipulated by the fear of malpractice into recommending unnecessary procedures that individuals accept because of an information disadvantage. We have little compulsion to overcome this disadvantage because we are not the primary buyers of our own health care. The current position is untenable, and it’s in our interest to influence change with the free market. There are models we can build off, and in the future, it seems likely that patient-advocates will possess the medical knowledge and fiduciary responsibility to allow their clients to decrease their personal costs and increase their quality of life despite a broken system, beating the path down good health reform.  I’ve called this new industry “FutureHealth” in my own thinking, but I don’t like the way that sounds. Can you suggest a better name in the comments? 

OK, that wraps up the word sushi, on with the more gluttonous show…

I backed Obama for his strength in foreign policy and the economy, on those fronts he’s made careful and reasonable decision –curbing a massive economic decline while positioning the US well abroad (specifically regarding War in the Middle East and the Iran Election). He’s done us one better and placed his political chips on the table of the most pressing economic issue today: health care.

People often take issue with framing health care as an economic issue — at it’s core it deals with the life and well-being (or lack there-of) of human beings, so it’s clearly a social issue, and yet — 20% of total government spending is on medicaid/medicare and both government and personal health spending are rising at rapacious rates (2 to 3 percent faster than inflation). If we don’t fix health care, it will bankrupt well before it kills.

There have been a series of fascinating articles this summer exposing the perverse economics of health care — two stand out: Atul Gawande’s watershed piece in The New Yorker, “McAllen, Texas and the high cost of health care” and, more recently, David Goldhill’s piece in the Atlantic Monthly, “How American Health Care Killed My Father.” Both conclude the incentive structure of the medical system is broken. The Doctors, fearing malpractice suits, recommend unnecessary procedures. Patients, at a severe information disadvantage and with little skin in the game perceived when it comes to payment, accept this recommendation. Insurance foots the bill and in search of greater profits tries to shirk as many payouts as possible and, if faced with an inability to do so, raises rates (making it harder for individuals to maintain health insurance).

The heart of the health care problem therefore seems to be unnecessary procedures (estimated at 30% of annual medical costs) and lack of innovation in the patient experience.

To solve both issues, patients must become the central focus of the system. By creating strong financial incentives for patients to judiciously use health care you would create a health services industry that must curb costs and cater to the patient’s experience, improving care, along with an information industry that will eliminate the information disadvantage that allows patients to be easily manipulated today.

Unfortunately, a quick, sweeping change (legislative or otherwise), requiring individuals to foot more medical bills is unlikely (at best) to happen when one of the largest industries is involved, people’s pocketbooks are at stake and there’s no existing use to defend that this system will be preferable in the long-run. Our brains are bad at evaluating risk-reward when the status quo is an option (for however briefly) and the risk involves our health and our savings account.

This means the change must happen gradually, and likely (at least initially) through market forces rather than legislation.

Luckily, there is already a subset of early adopters that care aggressively about health and patient experience and have been spurring innovation on both fronts: the wealthy.

The wealthy have developed a tool that helps them navigate the complexities of health care, enjoy a better patient experience, and obtain the information and access required for better preventive care: concierge doctors. Concierge (also known as “boutique”) doctors require extra cost from a more limited subset of patients who receive expiriential perks like same-day appointments and higher levels of access to their doctor. These can range from the expensive MD2 (24K/year for a family) to the relatively inexpensive (I pay $150/yr to a concierge practice in San Francisco), but access and benefit tends to flow linearly across that range (at the end of the day you’re buying time from highly skilled, valuable people).

Boutique medicine puts the patient in the buyer’s seat and creates an opportunity for the patient to take much more control of their health and utilize preventive care to decrease health needs. Once the patients health costs are more predictable (and probably far below the average), the concierge relationship helps the patient gain information advantage to increase confidence in making alternative purchasing decisions, perhaps self- or co-operative insuring.

So, there’s a clear path to improving health care, and the first hurdle in our way is visible and defined. A company that can accomplish the same (or similar) effect as boutique doctors for the rest of us will create the passage point to the future of health care.

At the highest level, this new class of doctors need not be doctors at all, but rather “patient-advocates” that maintain enough medical knowledge to ensure proper care and are capable of supporting and helping patients through both simple and complex medical situations. At the lowest levels, this function may be a game or service that encourages more healthful activity (think DailyMile, tweetwhatyoueat, FourSquare, or others).

There are many people in this FutureHealth industry, but one seems particularly well-placed to bring about the next step in the industry’s evolution, a small company called HelloHealth (disclaimer: Jay Parkinson, CEO of HelloHealth, is a friend). They are creating a platform where doctors can interact with patients in a more traditional primary-care role: hands-on, preventive care administered in a personal fashion. To the extent that HelloHealth can create technical tools that help their doctors save time (like automated paperwork, electronic patient interactions, and more), they can lower the cost of access for patients into a realm affordable for the average joe (they seem to have already gotten into the high-end of this range).

Finally, I’ve dubbed this new industry “FutureHealth” in my head, but I don’t like the way that sounds. Can you suggest a better name in the comments? 

Edit Notification: I published the first draft of this on my blackberry without review; I have sense gone back and fixed any typos and lack of links I could find. I have sent this to a few knowledgeable friends for feedback. I may edit again for clarity based on their suggestions.