Is Our Need for Choice Driving Up the Cost of Healthcare?

By | January 20, 2022

We are a country founded on individual rights. As a society, we have also decided that healthcare is a right of citizenship; we do not permit the denial of care based on one’s ability to pay. Unfortunately, the cost of the administrative components of the healthcare ecosystem is a burden on the overall cost of care.

Many of these costs are directly related to our desire to be individualistic which can also be articulated as “we prefer a choice.” Having a choice in providers, payers, treatments, and payment models leads to a level of complexity as these different entities attempt to interact with each other. Additionally, our desire to protect every aspect of our information, leads to additional inefficiencies since there is no single person identifier across all systems. Meaning, heath care providers must effectively recreate your identity in every electronic chart system, which is a significant barrier to interoperability.  This fragmentation does in fact lead to greater individual choice, but it creates an increased level of complexity, cost, and inefficiencies.

Furthermore, whenever individualism is at the forefront, this creates competition in a market. Though one might argue that such competition should drive down prices, the competing part is also a cost. A large percentage of a product cost stems from the need for advertising, sales, and customer acquisition. Furthermore, there is an incentive to sell the consumer an expensive yet possibly unnecessary product that they may not have the ability to understand its purpose or need for its specific situation fully. Healthcare is not a pure market; the consumer cannot fully appreciate or understand the complexities, nor do they choose to need services. No one wakes up in the morning stating their goal is to purchase healthcare.

It’s crucial to recognize these dynamics. Regrettably, we appear to be in a situation where we want the ability to have our cake and eat it too, all while not gaining weight. Yes, these are all laudable desires, yet inconsistent with our concern over healthcare affordability and everyone having equitable access to care. Furthermore, presently we seem unwilling to acquiesce in any direction. And it is always the fault of some portion of the industry. Sure, there are prevalent issues in all aspects of the healthcare ecosystem; however, deeper still, we need to be honest with ourselves regarding the root issues in order to move forward.

There is nothing wrong with our desires, as long as we understand the costs associated with them. Individualism should come with added expense as there is also greater personal benefit and complexity is expensive. Of course, individualism requires complex models. If we continue down this path, we will need to pivot our thinking to “scalable, mass individualism.” We already consider this ideal within the context of precision medicine. If we want individualism and cost containment, we will need to create models that affordably deliver choice – definitely a worthy direction, yet, one that will require an innovative approach.