A recent report from Moody’s Analytics, by chief economist Mark Zandi, had an eye-opening fact: the top 10% of earners in the U.S. – those who make $250,000 or more – now account for just shy (49.7%) of half of consumer spending. If that strikes you as unusual, you’re right. It is a record since at least 1989. Thirty years ago the comparable percentage was 36%.
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This too often describes our healthcare system. Credit: Council on Europe |
“The finances of the well-to-do have never been better, their spending never stronger and the economy never more dependent on that group,” wrote Dr. Zandi. He added: "Wealthier households are financially more secure and thus more able and willing to spend their income. That is, they save less than they would otherwise.”
The rest
of us are struggling to hold our own against inflation, not always successfully.
It’s why companies like Costco and Walmart are
trying to target upscale shoppers, while “value” oriented firms like Big
Lots, Family
Dollar, or Kohl’s
are closing stores or even declaring bankruptcy.
This
extreme bifurcation, of course, made me think of healthcare, where – as is famously
known – half of all spending is
attributable to only 5% of patients. In case you’d forgotten, in
healthcare, half the population accounts for 97% of all spending, so the other
half accounts for a measly 3%.
Now, you might say, neither of those is surprising: rich people spend more, and sicker people cost more. But somehow neither of those seems right to me.
I started thinking more about this after reading a recent New York Times op-ed from Ezra Klein. In it he makes the following assertion:
The answer to a politics of scarcity is a politics of abundance, a politics that asks what it is that people really need and then organizes government to make sure there is enough of it.
Mr. Klein
didn’t coin the phrase “politics of abundance,” but he and Derek Thompson did
just write a book on the topic (Abundance)
that discusses their thoughts at more length. I have not read the book, but I
saw a quote from it that I quite liked: “What is scarce that should be
abundant? What is hard to build that should be easy?”
And so we’re
back to healthcare.
We seem to
live in a country where healthcare is too scarce. A new
analysis suggests that we have a looming shortage of hospital beds, and if
you live in a rural area, it’s already
here. If you believe the Association of American Medical Colleges, we have
a looming
physician shortage, and if you’re looking for primary care, it’s
already here. We’re facing nursing
storages, pharmacist
shortages, nursing
home worker shortages, home
health worker shortages, to name a few. We even have shortages
of many critical prescriptions, including some
needed for cancer treatments.
Despite
all these shortages or would-be shortages, of course, we manage to spend way more than other countries on healthcare.
One can only imagine how much we might be spending if there were no shortages. I
take that back: I’m not sure I can imagine.
In the category
of things that are scarce that should be abundant, and/or things that are hard
to build that should be easy, I’d probably put housing at the top but
healthcare as a close second. The trouble is, when we pour more money into
healthcare, as we are wont to do, we don’t seem to fill any of our many
shortages, much less improve the quality of care or outcomes.
In his
article, Mr. Klein recounts the long saga of California’s Prop 1A, which called
for a high speed rail line between Los Angeles and San Francisco. Other
countries have high speed rail lines, most
notably Japan, so certainly the richest state in the richest country should
be able to build such a line. But, nope, 15 years later the predicted cost of
the line has ballooned 300%, not much of the line is actually complete, and
there is no end in sight, much less money available to complete it.
It reminds
me of ACA: important goals, lots of money spent towards achieving them, some key
accomplishments to show, but oh-so-far from achieving what we actually need.
We can’t
keep going on the way we’ve been going on. We need to make scarce health care abundant,
and to make things that are hard to build in healthcare easy to build. Finally, we may be approaching technologies
that would allow those.
It starts
with A.I., as everything seems to these days. Healthcare, to my surprise, has started
to embrace the use of A.I. Whether it is to assist physicians, to handle the too-many
administrative tasks, to develop new drugs, it’s clear there will be a role for
A.I. in healthcare.
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Credit: PwC |
Here’s my
plea: let’s use A.I. to make health care abundant – and cheap. Let’s make A.I. make
building resources used in healthcare – be they people, devices, drugs, or buildings
– easy to build. Simply adding A.I. into our existing system won’t do those. We
have to design it towards those ends.
And let’s
not stop at A.I. I’ve long been a fan of robots – be they full-sized, nano, or
anything in-between – in healthcare. We know we have people shortages, especially
for caregiving, and we should be planning for how robots can help fill those.
But we need to use them with the abundance mentality: make them cheaply, use
them ubiquitously, make them readily available. I think of how Ukraine has reinvented drones for its
war efforts, because American drones were too expensive, too few, and too uncertain.
We need that mentality for building healthcare robots.
Same for
3D printing. Medical devices, supplies, even prescription drugs: we should be ramping
up use of 3D printing to make them – you guessed it – more abundant and easier
to build, not to mention much cheaper. The companies currently making
them won’t like it, of course, but our healthcare system doesn’t exist to make
them money. Or, at least, it shouldn’t.
The people
and companies currently profiting from healthcare thrive on scarcity –
perceived or real—and on making things hard to build. We need healthcare
leaders that want us to thrive on abundance.