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Health care – not a ‘system’ but an Industry.

To say we have a “health care system” is laughable; we actually have is a disconnected bunch of stakeholders who all view health care and the financing thereof through their own distinct lens.  There’s a:

  • heavy emphasis on profit and personal/corporate gain from individuals and organizations ‘serving’ the health care needs of Americans,
  • all subject to direction and oversight by an increasingly overburdened regulatory infrastructure that in turn is
  • directed by legislators who are often beholden to those
  • folks making a living off the “system”.

Any wonder it’s completely screwed up?

Yet we often lose track of these central challenges when thinking about/developing solutions to problems in health care delivery and financing.  Quoting Chris Brigham, M.D, “Many of the challenges we face in workers’ compensation are the results of flawed processes and wrong incentives – that drive certain behaviors – ultimately harming injured workers and society”.

There are a couple resources that help bring things back into focus.

First is the film, Escape Fire: The Fight to Rescue American Healthcare” This is a terrific documentary of a medical industry – not system – with profit-driven, rather than patient-driven care.  It has played on CNN several times during the past month and is available on ITunes and as a DVD.   Our health care costs are approaching 20% of our gross domestic product. We spend $300 billion on pharmaceutical drugs – almost as much as the rest of the world combined. 65% of Americans are overweight and 75% of healthcare costs are spent on preventable diseases that are the major causes of disability and death in our society. It is inexcusable. 

The second is an insightful article “Chronic Pain: Fundamental Scientific Considerations, Specifically for Legal Claims” by Robert J. Barth, PhD which was the lead article in the January / February 2013 issue of the AMA Guides Newsletter.  Barth’s article is an in-depth discussion of evidence and scientific findings indicating eligibility for compensation is the domi­nant factor for chronic pain claims.

With chronic pain the reef on which the ship of workers comp is increasingly likely to founder, Barth’s piece is well worth the read.  The key sentence – Barth quoting from a speech given by the author of a study on back pain – is this:

“Minor trauma was only associated with serious low back pain in a compensation setting.” [emphasis added]

Barth – “None of the surveyed participants who were NOT eligible for compensation developed serious low back pain after minor trauma.”

And there you have it: unequivocal evidence that there’s a huge amount of “secondary gain” driven medical care.

What does this mean for you?

Anyone who thinks there are simple answers to our health care mess is a simpleton. 


2 thoughts on “Health care – not a ‘system’ but an Industry.”

  1. This is exactly right. I have been on several panels over the past few years on the topic of ‘health care reform’ and every time I start out saying we should bar the use of the word ‘system’ when discussing health care financing and delivery in the United States. The problem if you start with the notion there is a system or systems is that it leads to policymakers and others trying to apply concepts that only work if there is truly some semblance of a system. This is one of the reasons that neither the folks supporting PPACA nor the opponents advocating a ‘market’ are really ‘fixing’ the issues of health care financing and delivery.

  2. You are right on target with this one Joe. My recent blog “The De-Evolution of Claims Management” and the graphic about sums it up (see:

    Indeed, we don’t have a system today. Over the past couple decades the claims role transitioned from a process of managing disability and indemnity to managing a very sophisticated medical process. Unfortunately, rather than evolving the technologies in response to the complexities of the environment, the industry responded by scaffolding applications onto the old legacy technologies. These concoctions of technologies offer efficient applications, but they have a limited scope and cannot communicate with one another. Subsequently, the systems have become bloated with inefficient and ineffective workflows. The overall claims management process has suffered and it can no longer offer a satisfactory client experience.

    Albert Einstein wrote: “Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.” If we want to begin addressing the issue we need to begin taking steps that call into question the way the industry does business today. There’s a need for much more transparency and interoperability.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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