The Outlook for 2011 in Health Care

Today's date, 1/11/11, suggests a contrived approach to blogging about the New Year -- like predicting the one big change to expect or the top eleven predictions for 2011.  However, my crystal ball view for this year is not precise or symmetrical.  It is very cloudy.  In my 40+ years of full-time work in this business, I have never been more uncertain about the near-term future.  Health care could go in several different directions this year, and it almost certainly will.  We need to be prepared for the simultaneous occurrence of seemingly contradictory outcomes.  One of my favorite Oriental sayings sums it up nicely: "Things are not as they seem, nor are they otherwise."

If you are likewise confused in your own thoughts about the immediate future, I believe you understand what's going on.  Nothing makes sense.  Health care's leaders do not have a roadmap to follow because there's no consensus on where we want to go and how to get there.  The country does not have any identifiable leaders who have a persuasive vision and the power to move the health system in a clear direction this year, and I certainly do not see any political or economic forces that suggest rational convergence is on the horizon.  Rather, I foresee unraveling (but not repeal) of the health reform laws due to shortfalls in appropriations, plus exemptions from the laws to the point that exceptions will be the rule.  And the annual increase in health spending -- down to 4% last year -- will fall even further due to serious structural problems in the economy.  We are approaching zero growth in the medical sector.  The underlying problems are likely to be solved in the long-run, but not in 2011.  The wild card is constitutionality of the health reform laws.

My perspective on the future is undeniably shaped by formal training in economics, with its theoretical assumption that the "higgle and joggle" of the marketplace will move us toward desirable equilibrium.  The philosophical question that divides economists is how much the process should be managed by government vs. how much it should be left to the "invisible hand."  Because our political system is broken, I think that providers, payers, and purchasers need to lead the way in setting the nation on a better course and reallocating resources to move us in the right direction.  My crystal ball doesn't suggest that this will likely happen in the next 12 months.  I hope I'm wrong.  Yet, as another Oriental sage once said, "Surely, we will end up where we are headed if we do not change direction."  Can anything be done to start pushing us in a good direction in 2011?