Back to the Future Of Medicine
Learning from Our Past Lessons for Our Financial Future Thomas H. Lee, MD May 18, 2050 To the Editors:
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n this year 2050, health care is in crisis. Costs are rising faster than ever, explosions in biogenetic and microtherapeutic technology are overwhelming today’s providers, and workdays are only getting longer. Meanwhile, the obliteration of food supplies and the global spread of prion diseases pose real threats to the human race. It occurs to this humble reader that we should halt all debate on the proposed increase in membership dues and begin to consider the real problems that face our noble profession. Though a distant memory already, it was only near the turn of the century when we faced challenges that seemed equally insurmountable. As recently as 2012, health care costs totaled a whopping 23 percent of GDP and notable businesses such as Ford and GM nearly went bankrupt before the federal government intervened. It may be hard to believe, but back then more than 80 percent of physicians used paper for record keeping, 50 million patients remained uninsured, HIV was considered a terminal illness, and nearly all vaccines were still delivered by injection. Yes, we’ve made dramatic progress since then and we can do the same going forward, but we must remember that these changes didn’t happen without hard work, tough changes in policy, and a firm desire to do what’s right for the patient. Lest we forget, our last fifty years of accomplishments have been driven by key moments, movements, and milestones that should serve as inspiration for our next fifty years. Given today’s environment of political divide and turmoil, it’s important to remember some of 14 San Francisco Medicine May 2008
the more pivotal events in recent memory and put our current challenges in proper perspective.
motion.
Financial Crisis of 2010
To the surprise of most experts, however, the health care system did not collapse. Mortality rates remained unchanged while health care expenditures leveled off. Patients started making financially-minded health care decisions and commercial health plans seized the opportunity to create even more consumer-directed programs. Physician dissatisfaction, however, peaked during this period. Real incomes continued to fall while cost-conscious patients increasingly turned to their physicians for financial advice. Frustrated, a growing number of primary care physicians and specialists stopped accepting insurance altogether. Over the next several years, the exodus from insurance-based reimbursement continued despite calls for legislation, and by 2015, almost 25 percent of physicians did not accept any form of health insurance, and almost 30 percent of consumers belonged to a high-deductible health plan. Boutique and concierge practices thrived in this new environment, while radical new forms of delivery models began to appear. Web-based microconsultation, packaged lifestyle services, a la carte health plans, and ultra-boutique models all came into existence during this time. Internetenabled services and what were then called “electronic health records” became standard among physicians, mostly fueled by the need to innovate and differentiate in an increasingly digital world. Though there was some concern that these radical new delivery models selectively targeted the more affluent, it also appeared that some of these models demonstrated quality
Perhaps the most important event in the history of U.S. medicine was a financial one. The recession and near collapse of the federal banking system, beginning in 2008 with the mortgage meltdown and further exacerbated by the near bankruptcy of several financial institutions and blue-chip companies, resulted in a radical wake-up call for policy makers in Washington. Despite the nation’s withdrawal from the Middle East, military conflicts worldwide and a growing number of domestic terrorist threats necessitated the expansion of a military budget that was rivaled only by that of Medicare. Facing the possible threat of federal collapse, the President and lawmakers passed the Emergency Medicare Reform Bill, despite fierce and universal opposition. Though the bill was positioned as a temporary five-year cap on total Medicare expenditures, it was renewed for another five years until it was ultimately replaced by the landmark Health Care Reform bill of 2020. Suddenly, the lifeline of the health care economy had been cut. And the cuts went deep. Terminal illness: nonreimbursable after six months. Experimental procedures: uncovered. Lifestyle-related procedures and hospitalizations: 20 percent coinsurance or mandated gap insurance. Doomsday projections of plague and personal bankruptcy abounded. Health care stocks plummeted while emigration to Canada skyrocketed. The monumental shift to consumer-based financing of health care had been put into
Rise of Innovative Delivery Models (2010–2015)
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