Western governments are wrestling unsuccessfully, with healthcare costs

Governments across the Western world are trying unsuccessfully to control rising  healthcare costs.

Like Heracles battling the Hydra, they face a daunting task.

There are three major problems.

  • An ageing but demanding population who see healthcare as something ‘someone else’ should manage and pay for.
  • Powerful lobby groups that capitalize on this populations anxieties by continuously offering ‘the latest life saving’ services while demeaning attempts at cost control as ‘cruel and heartless’.
  • A massive industry that is now the biggest employer in many cities across the western world, from bureaucrates to nurses to allied health. Healthcare doesn’t just mean massive profits. It also means powerful unions.

Australian politicians have turned to privatisation, claiming it will –

‘drive down costs, force patients to behave like price conscious consumers and force efficiencies.’

Where else have we heard that before?

America.

The USA now spends close to 18% of GDP on healthcare. The medical industry has destroyed entire generations of Americans with medical bankruptcy. The net result? The lowest health outcomes in the entire western world.

Ideology don’t bring down healthcare costs.

The socialist style public health systems in Europe are also headed for disaster.

The OECD reports that the current growth in health care budgets is completely unsustainable.

Healthcare is like the Greek myth of the Hydra. A poisonous serpent that reputedly grew two heads every time one was cut off, in a desperate attempt to control it.

Modern reformists should take heed of the Greek heroes tactics.

Heracles eventually overcame the mythical serpent by using his brains to outsmart it, rather than just hacking at it with a sword.

Countries with sustainable health systems have been ruthless with hospitals, refocused on primary care and forced their populations to take personal responsibility.

Denmark implemented major healthcare reform in 2007 

They reduced the number of their hospitals by one third, and forced those that remained to both modernise, and focus on a particular specialisation.

Primary care in community hubs that were able to managed the entire of patients treatments became a major focus.

The result? After a short term public backlash, costs are stable, reform is up and the community is satisfied.

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The people of Singapore are forced to save for their healthcare through mandatory savings accounts.

If they are unwell and require hospitalisation they can receive heavily subsidized treatments. If they can’t afford hospital care, the government may add money to their private savings account. 

The result? 5% of GDP spent on healthcare (that’s half what other western nations are paying) to achieve some of the best outcomes in the world.

 

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Germany has a joint payment system funded by compulsory private insurance and government funds.

The result of this controlled private system is that Germany has the most restriction-free and consumer-oriented healthcare system in Europe.

Patients are allowed to seek almost any type of care they wish whenever they want it.

Health insurance plans have to compete with each other. The ability to be treated at home if you wish, is a legally mandated right.

The result? An highly efficient system, with build in competition and a far higher level of home care than other western nations.

The future

Unfortunately, Australia has no intelligent health policy in sight. Both the major parties waste money and energy throwing outdated political rhetoric at each other, rather than working to achieve long term goals.

Australian government hospitals are  bureaucratic, costly and inefficient. Emergency departments are overrun with elderly people with chronic conditions because they are free and open 24/7, where as many GP clinics charge a fee and have limited hours. Innovation is often buried in red tape. Nurses and other unions hold enormous power. 

Australian private hospitals cost more every year in both private insurance fees and out of pocket costs. They tend to focus on hotel style accommodation rather than efficiency. Information about errors and costs are frequently hidden. Private specialists can earn up to six times their normal wage for performing the same procedure as they do in the public sector. Discharge planning and links to community care are non existent or minimal.

The bottom line is, countries that fail to control the healthcare serpent will eventually be destroyed.

Healthcare costs are set to become the Greek tragedy of the 21st Century.

As healthcare costs continue to skyrocket, less money is available for public infrastructure or student education.

I believe a few western countries will survive, but only by learning from Heracles. They must focus on clear goals and act in an intelligent manner.

Countries that fail to tackle health industry reform face collapse under the weight of medical bankruptcy.

Wikihospitals July 2015

Hospital centralization and performance in Denmark—Ten years on

The 3 factors that make Singapore’s health system the envy of the West

What Health Care Needs: Real Consumers and Dynamic Competition – The Atlantic October 2012

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