TED'S TAKE: U.S. HEALTHCARE EXPLAINED IN A FEW WORDS

 The U.S. spends more on healthcare that any other developed nation. We spend more by a good margin; both in total and per capita. Upon reflection, the cause for this can be summed up through just a few explanations.

1) Government design, administration and policy.

2) Benefit design.

3) Induction factor.

4) Lack of budget limits, management or constraints.

5) Lack of engaged population.

Here's the role of each:

1) Government Design, Administration and Policy.

We must begin by understanding that the government, initially Congress, regulatory agencies and then the administration typically are involved in the design of healthcare policy. Assuming they can get consensus, Congress can write language and chart policy direction and spending and then the administrative agencies have the role of developing the particular program.

There is a concern that if governmental agencies either do not fully understand the complexities of the program or don't fully think through possible ramifications of the program, that they could fail to see the unintended consequences associated with the incentives they are creating which would lead to further changes being needed, as well as likely delays and costs. History shows that governmental agencies often fall into this pattern, jumping in to fix programs too late leading to a bunch of up and down policy changes.

2) Benefit Design.

Second, because regulators are often not the intended beneficiary of the programs they are developing there can be a disconnect in the design of the benefits they are proscribing. Let’s face it, the programs are designed for people to use but the benefit design can at times provoke too much use, both in terms of the people enrolled and the individual services used. An example of this unintended consequence; some companies actually lobby to have their services be a qualifying benefit and then advertise to the beneficiaries of the program to use the service which can lead to unintended use of a given program.

3) Induction Factors.

When an actuary estimates the price or cost of a program for the coming years they develop what is called an “induction factor.” They do this because they understand that service use is “induced” by the existence and incentive of the program designed. The program or service design determines the use and the consumption determines cost… but one must recognize all of these factors in order to properly manage or control any program.

4) Lack of Budget Limits, Management or Constraints.

Virtually all federal programs are only designed for a span of 10 years when they are created initially, and accordingly are based on estimates that project for 10 years. However, it is not until after that 10 year mark when most service inducing effects take over. Most federal programs are established without any true limits of spending, often left open ended – so the cost is what it is. Given this, there is no true constraint on what the program can spend and the ability to properly manage programs are limited. 5) Lack of Engaged Population (Beneficiaries).

The beneficiaries or users of health programs are often not as engaged in their own health journey as they should be. This includes not fully understanding benefits or getting themselves care or treatments needed to positively impact their overall health. Many beneficiaries could benefit from focusing on physiology, diet, and mental acuity as doing so can  ultimately lead to greater success in health outcomes and .

The outline and concepts above are intended to briefly contextualize the things we see happening in the US Healthcare system and virtually all government programs.  Many programs have developmental flaws or have grown disproportionately and beyond the original intended beneficiaries. This is sometimes known as mission creep or could also lead one to consider the effectiveness of the design and management of many government programs. With this broader view of many governmental health programs, I encourage readers to focus on introspection (looking inward and actively engaging in your own health and well-being), as well as self-reliance (advocate for yourself, don’t only expect others to do things for you).