Old Style Business Models Slow Medical Advances

[Why Syzygy]

http://www.futurepundit.com/
2009 February 02 Monday

A couple of articles in the New York Times draw attention to business models in medicine that slow the rate of improvement in medical service delivery.

Two main causes of the system’s ills are century-old business models, for the general hospital and the physician’s practice, both of which are based on treating illness, not promoting wellness. Hospitals and doctors are paid by insurers and the government for the health care equivalent of piecework: hospitals profit from full beds and doctors profit from repeat visits. There is no financial incentive to keep patients healthy.

“The business models were all created decades ago, and acute disease drove those costs at the time,” says Steve Wunker, a senior partner at the consulting firm Innosight. “Most businesses in this industry are looking at their business model as entirely immutable. They’re looking for innovative offerings that fit this frozen model.”

Why have old business models lasted so long in medicine? It seems hard to price wellness maintenance as compared to pricing procedures and consultations. How to incentivize individual doctors to keep patients healthy? It is a lot easier to say it is a worthy goal than to describe a system for doing it that would work financially. Anyone have suggestions along these lines?

...

Link to NYT article:
http://www.nytimes.com/2009/02/01/business/01unbox.html?_r=1&em

[cosmik debris]

1. The old business model is based on health care as a privilege

We are transitioning to a model where health care as a right. (Praise be to Obama for making that clear in his campaign)

As with any transition, it will be painful for some.

That's an interesting article, thanks for posting.

[Warpy]

2. They tried to give physicians incentives to keep people well

by basing their bonuses on how many patients did not have to seek care after a yearly checkup. That just led to a vast system based on denial of care when it is needed. It continues to kill people who might have been saved for many years of additional life.

Promoting wellness is a great idea, but it requires the patient to do most of the work. It can't be dictated, as anybody who's lived with a smoker or alcoholic can tell you.

The problem with medicine is forcing it into the business model, at all. Clearly the companies that produce drugs or devices can adhere to the model, but the delivery of care according to the usual business model has been a dismal failure. For one thing, nobody gets to choose when and how and how severely to become ill at any given time. For another, the pattern of illness stubbornly refuses to follow the ability to pay for its treatment.

Getting health care out of the for profit marketplaces should be the major priority, not tinkering with it to try to squeeze it into the marketplace. This is one place the marketplace has failed the most miserably.

It's time to move on.

[cosmik debris]

3. "This is one place the marketplace has failed the most miserably."

I don't have anything to add, I just wanted to repeat that.

[Demeter]

4. The Reality Behind the Business Model

will trip up the elite every single time. Excellent summary!