The future of . . . medicine

June 06, 2013
by Brendon Nafziger, DOTmed News Associate Editor
Health care, as David Goldhill sees it, is an unusual industry. In most industries, businesses compete on price, but not so in health care. Patients getting, say, an MRI, don’t shop around for the cheapest option (although, it turns out, they sometimes can). “Obviously health care has things that are meaningfully different from other industries,” Goldhill says. “But we made it so different.”

The president of the Game Show Network, Goldhill is a businessman who had no professional interest in health care until in 2007 he lost his father to a hospital-acquired infection. His recent book, Catastrophic Care: How American Health Care Killed My Father and How We Can Fix It (Knopf), examines what he sees as a broken, wasteful and sometimes dangerous system that needs more accountability and competition. Goldhill recently spoke to DOTmed Business News about one of health reform’s unintended effects, why we should be more like Singapore, and other happenings in U.S. health care.

Reaching critical mass

As Affordable Healthcare Act takes effect over the next few years, Goldhill sees it doing poorly at its presumed goals — expanding health care access while controlling costs. But this could be an inadvertent boon to price transparency and competition. That’s because the restrictions on the kind of policies that can be offered under ACA and other factors might lead companies to drop insurance or restructure it in a way that will ultimately leave more consumers paying for more care out-of-pocket. And as patients pay more out-of-pocket, more providers will compete on prices.

“I think we’re about to see a critical mass of people who are actually writing checks,” he says. “You will see providers compete on price and quality and I hope, ultimately, safety, and you’ll start to see the benefits of a quality market.”

Striving for Singapore

In his book, Goldhill envisions what he considers a real health care reform for the U.S. Instead of extending Medicare or Medicaid, we’d get a mixture of health saving accounts, which encourage citizens to sock away money for future health expenses, national catastrophic insurance coverage (called TrueCat in the book) for real medical emergencies, and loans to help meet deductibles for that insurance.

“I don’t kid myself,” he says. “The program that I describe in my book is something of a Utopia. It’s not something that’s politically realistic in our current environment.”

Nonetheless, it’s not completely Utopian. A similar system does, in fact, exist. Not here, but in Singapore, which provides nearly universal health care access to its citizens using a mix of forced savings and emergency insurance. “They have what looks like in the bulk of Singaporeans a true sense of financial security about health that no part of the American population has, so that’s inspiring,” Goldhill says. “Does the example of how a country of five and a half million does it (match with) how a country of 310 million does it?” Goldhill asks. Not necessarily, but the principles, he says, are “important to understand before we go further down a road that has been a catastrophe for us.”

The benefit of rankings

Safety grades for hospitals provided by organizations like Leapfrog Group, where Goldhill sits on the board, and Consumer Reports, which released its first ever hospital safety rankings last year, can help consumers, Goldhill says, mainly by pointing out meaningful differences in hospitals — such as that for many procedures, the greater the volume at the practice, generally the better they are at doing it. But the main benefit would come, again, once safety becomes a mark of competition. “The real improvement comes from when you start seeing billboards in your town that say, ‘Go to Uptown Hospital because Downtown Hospital will kill you.’ At that point, safety becomes paramount,” Goldhill says. “If you’ve ever been in a truly competitive business, the power of competition can focus your mind on constant improvements and can be so much greater than anything that’s rule-based or centrally planned.”