Payers Drive Value-Based Healthcare Reform
As change continues to reverberate throughout the healthcare industry, health insurers are well-positioned to influence greater cost efficiencies.
For millennia, divinity was the guiding force in medicine, through the healing hands of the local priest and shaman.
Then 2,500 years ago, the Greek physician Hippocrates helped launch the Scientific Revolution, which transformed Western medicine. A pledge "to do no harm" became the first patient-centered medical maxim and scientific diagnosis was elevated over the divine.
Now, at least in the United States, medical advances based on the laws of science appear to be butting up against the laws of economics.
With some medications costing $1,000 per pill and inpatient hospital bills often breaking the $100,000 mark, healthcare payers from Medicare to insurance companies to private citizens are finding ever-increasing medical costs unbearable.
"There are finite resources. Economics is the study of finite resources," David Friend, who holds a medical degree from the University of Connecticut and an MBA from The Wharton School at UPenn, told me recently.
"Healthcare is part of the finite resources the country has… Everything else is going to get crowded out. Something has to give if you can't raise taxes and roads and bridges are falling apart. The answer is to become more efficient."
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