Healthcare Access and Payment Reform in the US

Podcast, Videos


Chris Saxman, Head of Product Strategy at UCM Digital Health, joined me for a wide-ranging discussion around current issues with the US healthcare system and how to fix them, the “health as a product” framework, telehealth & digital health technologies for improving patient-centricity, and much more. 

Here is a sneak peek of our conversation:

Q: Can you actually describe to us how we typically refer to fiat medicine versus what we oftentimes refer to as market medicine and then finally how does crony medicine fit into this equation?

A: There was a great article that sort of talked about those. Let’s talk about the first and the last because I actually think they’re very similar. Fiat medicine is medicine organized and delivered by governmental agencies. The NIH is a great example of that in the sense that the government – by fiat, by Rule of Law, or administrative regulation – says, “This is what medicine will look like and if you want to provide medical services, you got to come work for us. We’re going to make sure everybody gets covered or whatever it is that the government wants to do – that’s fiat medicine. Crony medicine is kind of the same thing where instead of the government regulating, you’ve got private insurance companies, payers, and private healthcare systems coming together and negotiating what care will look like according to what they need.

Here in the US, healthcare is a B2B model and we buy healthcare the same way that we buy aircraft carriers. Big payer over here, which is the Defense Department. I don’t know who builds aircraft carriers over there, they spent three years locked in a conference room someplace with the lawyers and the engineers and drop a contract to build an aircraft carrier. Then a decade later, out comes an aircraft carrier. And that’s how we buy healthcare. I mean I know I’ve negotiated some of those agreements and just tiny little baby ones can take, like I did, a year sometimes.

Furthermore, the other reason that you call it cronyism is because you’ll notice that the people that were in that lock room negotiation, in this case, the hospital administrators, the lawyers, plan design people, and the payers, they’re the ones arguing. The people that aren’t in the room are the customer (the patient) and the supplier (the doctors). Yes, some health administrators might be doctors but if you ask the doctor what services that he just performed for you cost today, he won’t be able to answer you. I know, I’ve tried it and they have no idea. That’s the reason that it’s been known as crony capitalism and that’s perhaps a little bit cynical but is not all that far off because it’s exactly that.

These aren’t market forces, these are people working on different private transactions based, not on supply and demand, not on ECON 101 but, on other things. In a previous life, I did a lot of emerging markets and looked at capitalism as it existed in say, Latin America in the 80s, a lot of that was private transactions but those were not free and open markets by any means and that’s the same thing. What I’m saying here is more nuanced than that.

Then we look at market medicine and that doesn’t exist much. There are a few examples that proved that demonstrate its possibility but market medicine is kind of just what it sounds like. People buying things from service providers. You go into the doctor and you put down your credit card and you get coverage. You buy health insurance in the same way you buy your home owner’s insurance. That’s a decision that you make. It’s not done for you by your employer. Today, I just updated my home owner’s insurance and I did that with a broker, personally. I put my credit card down and I paid for that. If we can develop models for that, that is market-based medicine.

For more of our discussion, you can watch the whole Fireside Chat with Chris Saxman, or listen to the podcast version, below.

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