What Is a Medical Economist?

Economists are a diverse lot, focusing on everything from international trade and currency exchange rates to single industries and production processes.  Macro-economists focus on "big picture" phenomena like national income and employment, the money supply, and government economic policies.  Globalization is literally turning their world upside down.  The economic theories and models they learned in graduate school don't apply any more, so macro-economists are struggling to find new policies that will produce desired outcomes in international marketplaces.

Micro-economists, on the other hand, study resource allocation and productions processes at the level of specific industries -- including health care.  A medical economist with graduate training should have the skills to study the flow of goods and services through a medical enterprise (hospital, medical group, drug company, health plan, etc.) and to identify changes that would reduce costs of production, improve quality of output, or otherwise enhance productivity of workers, equipment, and capital.  A good medical economist can easily find wasted resources in the health care delivery system and then develop ways to put them to more productive use.

Medical economists should be busily at work in today's health care organizations because resources for medical services are becoming very scarce.  Patients and their traditional third-party payers simply don't have any more money to pay for care.  The health sector is finally hitting a budget constraint.  It is no longer "different" from other sectors of the economy, so conventional economic analysis is now applicable to solving the serious problems on one of our economy's most inefficient and ineffective sectors.

When called upon to apply their analytical and problem-solving skills, medical economists can be very valuable members of clinician-led, multi-disciplinary teams with responsibility and authority to make sure that medical services are provided correctly all the time, as inexpensively as possible.  I would never expect a medical economist to solve health care's problems single-handedly, but neither would I expect the problems to be solved without appropriate input from one.        

Unfortunately, medical economists have tended to concentrate their efforts on a macro-economic issue, health care's rising consumption of the gross domestic product (GDP).  This narrow focus makes me think of many medical economists as Chicken Littles who loudly proclaim that the sky is falling without taking time to understand what's really happening.  My health sector friends in Europe have come to the same conclusion.  They note that the U.S. has far more medical economists than any other country (by at least a factor of ten, I'll bet), yet it has one of the developed world's most unproductive health care delivery systems.  I think that the health of our economy and our residents would be a whole lot better off if medical economists would quit talking about health care's rising costs and start doing something about it instead.  What do you think?

      

What is a health futurist?

My ongoing transition from corporate VP to self-employment is posing several challenges, including the need to design a new business card.  I decided to list three functional roles after my name rather than an executive title -- generating the next three blog posts because each function deserves an explanation.  My primary professional self-identity is being a health futurist, so just what does that mean?          

Ever since serving as the Colorado Governor's health policy adviser back in the 1980s, I've purposefully analyzed the five trends that I believe are most likely to shape health care delivery over two to five years.  I decided to follow only the top five trends because they account for at least 80% of the changes that ultimately occur, and organizations and their leaders rarely have the capacity to deal with more than a handful of challenges at a time.  I selected the 2-5 year horizon because it's the time frame within which strategic decisions can be made and implemented.  It gives a sense of immediacy for actions that need to be taken while outcomes can still be influenced.  (Whether organizations actually take timely steps to shape their futures is a separate challenge that I generally leave to colleagues with expertise in organizational change.)  

I also believe a health futurist should forecast the future, not predict it.  Predictions are statements of what will happen and when, such as health care spending will hit 20% of GDP in 2015.  Predictions assume continuation of trends that shaped the future in the past -- an absurdity in today's uncertain world because health care is being transformed by a revolution in clinical knowledge, unprecedented progress in communications and information technologies, and dramatic redistribution of financial responsibility in the medical marketplace.

Forecasts are estimates of the probabilities of possibilities, such as the likelihood that health care spending as a % of GDP in 2015 will be more, the same, or less than it is now.  (My current forecast for these possibilities is 20%, 60%, and 20%.)  The health futurist as forecaster is responsible for identifying the circumstances that could lead to each possibility and recommending interventions that could reasonably be expected to increase the probability of desired outcomes.

To me, being a health futurist is fun when motivated by a strong belief that progress can come from creative, purposeful responses to anticipated changes.  Forecast-based futurism sure beats the alternative of trying to cope with rigid, prediction-driven "reforms" like HITECH and PPACA.  I think we in the business can do better than the politicians, which is why my role as a health futurist is pondering the realm of the possible and suggesting options to create a variety of really good medical systems.  How do you approach the future of health care?  Are you having fun yet?

Did the Fat Lady Just Sing in "ObamaCare," the Opera?

Being a big fan of Wagnerian opera, I readily relate to the common saying that it isn't over until the fat lady sings.  Yesterday's action by U.S. District Judge Vinson has already generated more than one comment that the drama of ObamaCare is in its final scene, but I disagree.  We've still got lengthy acts to endure.  The legal denouement must still be determined by the Supreme Court, which apparently will not act any sooner than next year.  I am not qualified to second-guess the high court, but my reading of expert commentaries suggests that consensus within the legal community has shifted from strong belief in constitutionality a year ago toward considerable uncertainty -- even reasonable doubt -- today.  This opera has never been produced before, and its ending is yet to be written.

To borrow a thought from director Peter Sellars, ObamaCare really is a "mess worthy of an opera." (Sellars collaborated with composer John Adams in "Doctor Atomic" and "Nixon in China," two excellent operas based on political history.)  Health reform has a rich plot with several levels of conflicting action.  A president pushes a major project that is inconsistent with his historical personality and arguably a diversion from more pressing issues of the time.  The fated turn of events leads to unexpected outcomes that are both good and bad, etc.  I won't be surprised if "ObamaCare" is produced someday at the Met (whose excellent HD production of "Nixon in China" is coming to a theater near you on February 12).

Will this new opera be a tragedy?  A farce?  Sadly, I expect it will be a bit of both, and the Supreme Court decision will be only one of several forces represented on the stage when the final curtain falls.  Health reform's lack of coherence will figure prominently in the finale; the plot didn't make sense from the beginning.  Above all, a dysfunctional economy -- the ominous threat that should have been dispatched in the first act -- will turn out to be the villain that prevents a happy ending.  The chorus representing patients, providers, and payers will be expressing their dismay that things did not work out as hoped or planned.

Like Wagner's Ring cycle, the saga of reform will continue.  Even if the Supreme Court puts an end to ObamaCare, the U.S. still won't have an efficient and effective medical economy.  We must continue waiting for the fat lady's stirring pronouncement of health care Valhalla.  What other operas might help us understand the mess we are in and how to get out of it?  



        

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?

Forecast and Resolution for the New Decade

The infosphere has been full of predictions and resolutions for 2011, befitting the start of a new year.  Curiously, I've seen nothing to recognize the simultaneous arrival of a new decade.  The ten year horizon is much more interesting to me as a futurist, so here are my initial forecast and resolution for the new decade in health care.

The first task is naming the decade.  I propose "Crisis Teens," using crisis in the medical sense of a turning point where a life-threatening problem can get better or worse.  If the health care system in the U.S. were a patient, it would be in the critical care unit with a diagnosis of systemic failure and an uncertain prognosis.  The latest therapy (2010 health reform) isn't offering any realistic hope to improve the nation's health, and changes in the underlying circumstances of 2011 (Republican control of the House, legal challenges to the reform laws, increasing income disparity) suggest a strong possibility that the therapy will be withdrawn.  With no miracle cure on the horizon, the outlook for health care is uncertain at best and gloomy at worst.

This is not necessarily bad news.  Uncertainty can offer hope because it means that outcomes are not predestined.  Thoughtful, purposeful responses to anticipated changes can make a difference.  Consequently, my forecast for the coming decade is a range of outcomes (that is, successes and failures).  Many health care organizations -- particularly progressive, open-minded partnerships of providers, payers, and purchasers that recognize the need to work together -- will develop successful responses to the new circumstances.  Comparable numbers of organizations will either fail because they are not capable of adapting to new circumstances or will survive, barely.

For organizations desiring success, I propose the following New Decade's Resolution: to design an integrated health system that works, and then build it sooner rather than later.  Health systems with a good future will generally adopt a creative "do-it-yourself, now" approach that recognizes the enormous risks of waiting for politicians to find a viable solution later.

If anyone has a better suggestion than "Crisis Teens" to characterize the new decade -- or a different interpretation of the circumstances that will define it -- please reply with a comment.  (While you are at it, the past decade still needs a name.  The best suggestions I've seen so far are the "naughts" or the decade of "lost opportunities," and both explain the mess we are in today.)  I know from my first career as a weatherman that the best forecasts emerge from open discussions leading to clarification and even consensus.  A healthy debate is the key to a better understanding of the future and what we can do about it.  What are your forecasts and resolutions for health care in the new decade?