Healthcare, Meet Capitalism

Healthcare, Meet Capitalism
July 02 01:00 2014

Healthcare, Meet Capitalism

Self-described “lunatic-fringe disruptors” depict U.S. healthcare like one of Ayn Rand’s dystopias. The $2.7 trillion industry lacks accountability for exorbitant costs. The system incentivizes doctors (and hospitals) to do tests and procedures, instead of paying them to do their jobs—keeping people healthy. It’s like paying carpenters to use nails.

“I believe we are on the cusp of an oil rush—a fabulous revolution of profit-making and cost-saving in health care,” disruptor Jonathan Bush told a rapt audience at the Aspen Ideas Festival last week. In the Rand comparison, Bush might be John Galt—were he not exuding as much benevolence as relentless capitalism. And he’s not giving up on the system; he’s trying to upend it.

Last week I moderated a discussion that became heated—by moderated-panel standards, and by no part of mine—between Bush, Toby Cosgrove (CEO of the Cleveland Clinic), Rushika Fernandopulle (CEO of Iora Health), and Dena Bravata (CMO of Castlight Health). It ended in an emphatic plea by Bush to never donate money to a hospital.

That was met with equal parts laughter and applause. From Cosgrove, seated three inches to his right, neither.

Logos of healthcare disruptors
To Bush, CEO and co-founder of the $4.2 billion health-technology company athenahealth healthcare is a business, driven by markets like any other. Altruism and profit-driven business need not be at odds. It’s incomprehensible and unsustainable that people have no idea what their care costs and have no incentive to consider cheaper options.

“Profit is a dirty word among the corduroy-elbow crowd in the research hospitals and foundations,” Bush wrote in his recently-released book, Where Does It Hurt? “But just like any business, from Samsung to Dogfish Head Brewery, this industry will grow and innovate by figuring out what we need and want, and selling it to us at prices we’re willing and able to pay.”

In Aspen, Bush mentioned Invisalign braces and LASIK surgery as procedures that have been driven by the free market. These things started off exorbitantly expensive, but prices fell and fell. For LASIK, the procedure was “$2,800 per eye [in the 1990s]; now it’s $200 per eye, including a ride to and from the procedure.”…

Read full story at The Atlantic
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