It’s the stupid economy…

If a picture is worth a thousand words, the Daumier print below could serve as two blog posts. It aptly represents a tendency to miss what should attract our attention. I use this slide in my speeches to show how our focus on actions in Washington—particularly the recovery and insurance overhaul laws—is diverting us from the real challenge to our future. The comet racing toward us is not reform. It’s the economy that merits our full and immediate attention. Adverse economic trends threaten the near-term future of providers, payers, purchasers, and patients much more than the “reform” laws that are being examined in telescopic detail.

Health industry players are accustomed to looking to Washington for more money when times get tough, and the government has always delivered in the past. However, today’s economic outlook suggests persistent stagnation is the most likely scenario for the next few years. A simultaneous backlash against deficit spending is likely to halt real growth in government spending for the first time in many decades, meaning that the medical sector should not count on additional federal funds for its growth.

Sutton’s Law says to go where the money is. Unfortunately, as an economist and futurist, I cannot see any extra money anywhere. Corporations are struggling to stay barely profitable in a harsh global economy, and the outlook for consumers is correspondingly bleak. I simply do not know how average Americans are going to come up with the extra dollars that “reform” is expecting them to spend on health care over the next few years. (If anyone knows where to find more money for health care, please pass along the information in a comment. I’d love to have some good news to share with my readers.)

So what should be done to stay in the business of health care until 2014 when most Americans will presumably have insurance? Getting through the tough economic times ahead compels providers and payers to become efficient, to find how to perform necessary (but not necessarily the usual) business tasks at lower cost. At the same time, they need to find ways to provide more value by passing the savings along to cash-strapped consumers in better, less-expensive services.

Given that many of the marketplace’s inefficiencies are directly related to a dysfunctional reimbursement system involving all parties, solutions need to be developed with multiple business partners. No single entity can go it alone and expect to survive under current economic circumstances. Instead of looking to Washington for more money, now is the time for key stakeholders to collaborate in creating a good health system than works. It won’t be easy, but it sure beats the alternative of looking for distant solutions when real opportunities are visible with the naked eye. Has anyone got a better idea?