Fred Gluck said the ridiculously high prices of complexity and bureaucracy, not overpriced pharmaceuticals and not costly hospital stays, are the principle drivers behind the excessive price of healthcare in America. Though it might sound counterintuitive at first, rationally simplifying and minimizing the choice in fundamental health insurance is the key to fixing this drawback without resorting to socialized medicine or wiping out the United States insurance industry.
The USA spends much more on healthcare than other high-income nations, although our health outcomes at times seem to lag behind. That’s because as a lot as one-third of the $3.5 trillion we spend on healthcare every year does nothing to maintain individuals healthy or make patients feel better. It’s wasted on nonmedical administrative, marketing, and other peripheral actions such as pharmacy benefit managers. That is the results of a poorly structured healthcare system that isn’t really a “system” at all. And the complexity and lack of transparency present a fertile breeding ground for fraud and overutilization.
As a result of we treat health insurance as just another consumer product folks select to buy, we have a complex web of conflicting programs. A few of us get our health protection from private insurers, others from their employers, still others from the federal or state governments. Some are in networks. Some are usually not. Some individuals attempt to pay out of pocket, with often financially ruinous outcomes. It’s a convoluted setup that dooms us to billions of dollars in insidious cross-subsidies and spiraling hidden costs that have nothing to do with the quality of care we receive.
Fred Gluck is the former member of the Boards of Directors of HCA, retired managing partner of McKinsey and Co.