The cost of improving or maintaining the health of a population is not just the sum of dollars spent towards health itself. The healthcare system that supports the health of a population is absorbing a considerable portion of the dollars spent on the health of population. It is possible to increase a population’s health without rationing health care if we are able to address the inefficiencies of the healthcare system and direct resources specifically to the health producing activities in an efficient and effective manner.
There are several contributors to inefficiency in healthcare. First, there are several approaches a care provider can adopt to treat a patient. Some of these are expensive strategies and some are effective but not expensive. However, we do not have standardized care strategy that every physicians use to treat their patients. Physicians still operate as individual and autonomous decision makers when it comes to treatment strategies. This is unlike most other disciplines. Right or wrong, this is one of the major contributors of health care expenditure.
Second, health is easier and cheaper to maintain than to fix once broken. Even though we cry about increasing costs and spend millions on outcomes-based models, we still are not addressing fast food induced obesity, smoking induced diseases and other such self-created problems into consideration. If we can avoid such habits detrimental to health, many of the expensive medical conditions itself can eb reduced. This can save substantial amounts of dollars spent on treating those conditions induced by smoking and fast food.
Third is the lack of operational efficiency. A big part of healthcare costs is induced by healthcare systems is due to operational inefficiency. It is apparent that health care systems are not aware of the full potential of modern operational management techniques to reduce in efficiency and thus, costs of care.
Fourth, we waste resources by not having proper flow of information. Lack of information connectivity is more than just lack of information. It produces duplicate efforts, errors and additional spending as a result of lack of information flow across the care continuum.
Fifth, we have one of the greatest mechanisms to pay for healthcare- viz Health Insurance, however, it also results in moral hazard, which is a contributor to healthcare costs. The moral hazard is not something that is contained within a person’s or population’s healthcare decisions. It seems like our society and even the government is falling for this problem by not addressing prevention as a strategy to reduce healthcare costs and instead is thinking of providing additional care at lower costs.
Rationing is the last sort and it is just a cost cutting “nuclear bomb”- not a solution to the underlying problem. Marginal cost of human life increases as we age. It is impossible to extend life in an expensive way with additional healthcare procedures and advanced medicines. Prevention and optimal lifestyle are the key to a population’s health. If we can do that, improving the population’s health is possible without spending additional dollars on healthcare.