I have written in this space on numerous occasions about the challenge that employers face in providing affordable health care to their employees. Having been responsible for such programs as a former executive in a Fortune 500 company, I can assure you that employers do not embrace their role as providers of such programs. This is especially true in an era of global competition where the annual double digit growth in health care costs is not only the fastest growing cost for companies, but is a distinct  disadvantage when competing with countries whose costs are lower. That means every other country on the planet.

There is little debate that our per capita cost of health care is far and away the highest of any industrial country, more than doubling most. Also not in dispute (unless you are in denial) is that our outcomes are mid-pack at best. Then it occurred to me. We are not measuring the right outcomes. After all, the primary outcome of any for profit organization is profit. Now there’s a measure in which our outcomes are top of the heap.

And it’s perfectly logical. if you can maximize profitability (fueled by double digit annual sales increases, i.e. per capita costs) while providing mediocre outcomes, why would you look to do any more?  In this case, profit is not at all accretive to medical outcomes. Unlike the pharmaceutical business, where profit is essential to motivate costly research, for the medical insurance companies, it is simply taken out of the system.

I can only wonder at the cost reducing impact for employers and and all other purchasers of medical insurance if  profit became cost savings.  Until and unless our high cost system can start producing medical outcomes instead of financial ones, our system is unsustainable.  It is high time for a change.

This entry was posted on Thursday, September 3rd, 2009 at 9:49 am and is filed under Health Care. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.