How the Mighty Haven't Fallen

I recently read an article that speculated on how even the mighty Google could fade into irrelevance faster than we might think.  It made me wonder why that kind of change doesn't seem to happen in health care.

The Google article, by Farhad Manjoo in The Wall Street Journal, cited one-time technology leaders like Wang and DEC (for those of you with long memories), and pointed out that other long-time powerhouses such as Hewlett Packard and even Microsoft are furiously trying to reestablish themselves after decades of (relative) decline.  Most companies would love to have Microsoft's product position, revenue, and cash, but in 2015 most people would probably bet on Apple over Microsoft.  Manjoo quotes tech analyst Ben Thompson, who believes Google will lose out on brand advertising, which will go to companies that can create "immersive experiences" for consumers, engaging them for long periods of time.

Manhoo thinks Facebook is well-positioned to take advantage of the advertising shift, I'm thinking Twitch, but either way, it illustrates how even dominant market leaders in technology can get usurped almost overnight, the way Google did to 1990's search leaders like Inkatomi, Excite, AltaVisa, or Yahoo.  There's already a new DARPA-developed search engine called Memex which some say can do things Google search can't.  It is currently being used primarily for law enforcement activities (e.g., combating human trafficking), but perhaps in ten years we'll all be Memexing things on the Web instead of Googling them.

Then there's health care.

Just out of curiosity, I looked at share of spending by type of service in the National Health Expenditures, from 1960 to 2013.  Here's what I found:

Pretty astounding, isn't it?  For all our many clinical and technological advances, the same three health sectors that dominated health care spending in 1960 still command virtually the same shares in 2013 -- over 60% of our overall spending.  They've "lost" less than 2% of share to other types of spending during those decades.  

It hasn't all been smooth sailing, of course.  Hospital spending reached almost 40% of the total in the early 1980s (pre-DRG!), dipped below 30% in the early years of the 21st century, and has rebounded in this decade.  The physician share has been steadier -- a peak of around 22% in the early 2000's, a low of 18.3% in 1978, but mostly stayed around 20%.  Prescription drugs spending, on the other hand, got to as low as 4.5% of the total in 1981 and 1982, reached a peak of 10.4% in 2006, and now seems to be on a slow decline, despite various ominous warnings about the impact of expensive drugs.  But, all in all, the composition of Big 3 of the medical-industrial complex remains unchanged over a very long time.

It's as if the Big 3 U.S. auto manufacturers still maintained their 1960 dominance today, or the 3 TV broadcast networks still had their pre-cable/Internet share of viewers.  Both trios still have hefty market shares, still play key roles in their respective industries, but are nowhere near their historical dominance.  New competitors emerged to give consumers more options, and took away significant shares of those markets.  

Unlike what has happened in health care.  

To be fair, it is apples and oranges to contrast loss of market share for a single company with market share for a category of spending within a sector, but I think the point is illustrative.  I could look at share of, say, advertising spending for search engines in 1960 versus now but -- oh, that's right -- the search engine industry didn't even exist in 1960.  In most other parts of the economy, change comes so rapidly the past doesn't much resemble the present, but in health care that's not the case.

Hospitals, physicians, pharmaceuticals, and the health care industry generally have certainly evolved significantly in the past 50+ years, but it is more incremental evolution than the kind of "punctured equilibrium" Steve Jay Gould and others posit that result in rapid changes that overthrow species.  You'd think that the many crises our health care system has faced over the years would have offered opportunities for that kind of unexpected change, yet here we are, with a health care system that a time traveler from 1960 would easily recognize..

I don't have anything against hospitals, doctors, or prescription drugs, at least not in principle.  It just doesn't feel like progress that we're not coming up with radically new care and delivery options that don't rely on them.  

For example, IBM is trying to convince the FDA that it shouldn't regulate Watson, its "cognitive system" that it has used in a variety of health care and other contexts, in the same way it regulates medical devices.  I'm not holding my breath for the FDA to open things up.  I don't think the FDA has quite caught up with the concept of medical software (which could also include a number of apps), and I suspect the health care establishment is not going to be too supportive of allowing more latitude for such approaches.  Look at the ongoing battle about how to regulate telemedicine, despite overwhelming patient interest.  

Unlike most markets, health care isn't really driven by consumer demand.  A couple years ago, JAMA published a survey of physicians, in which  they blamed rising costs on pretty much everyone else but themselves, more than half even blaming patients.  A new study has cast doubt on the view that patient demand is driving unnecessary spending.  Looking at cancer patients, the authors found that only 1% of patients asked for clinically inappropriate care.  The saddest thing for me from the study was that only 8.7% of patient encounters included a patient demand.  We're a long, long way from informed patients taking responsibility for their own care, or their own health.

Having control over what constitutes the "practice of medicine" is certainly an effective way of forestalling new kinds of competitors.  That control has been placed in the hands of the providers practicing care, ostensibly to safeguard patients' interests,. but it's getting harder and harder to believe those interests are primary.  It seems more like protecting turf.  Our convoluted system of medical education similarly seems both old-fashioned and needlessly parochial.  If we don't address these kinds of self-serving mechanisms, the 2065 health care system might not look that much different than 2015's.  

A couple months ago I wrote a post that raised the question of whether, in a world where microbiome treatments, gene therapy, even nanobots may emerge as prevailing types of treatment, we'll even need physicians, at least in the same way we do now.  I received a number of comments that were aghast at the notion that we might not always need physicians to deliver our care.  I believe it is this kind of thinking that has allowed the Big 3 of health care to retain their dominance.  

If we can't even imagine a health care system that doesn't solely rely on the traditional sources of care, we'll certainly never achieve one.