Those who began their careers in the dot-com mania, like myself, have now been through two booms and busts. It becomes natural to look for a third one in our future. At this point, we know the only private sector expansion is taking place in the out-of-control healthcare sector, so that is the natural place to look.
Actually, you could find some arguments for a collapse of the vast US government itself, but I am of the opinion that a future administration will be forced to make dramatic cutbacks in certain spending areas and that such an outcome can be avoided. It’s possible that this could include the large medical subsidies and entitlements already in place, so that brings us back to the healthcare system.
Here, without solutions, are a few things that are way out of whack about our system:
- The vast payee, insurer, and processor structure needed because there are so many private and public entities involved. Similar to alcoholic beverage distributors, a lot of this system is mandated to exist by outmoded policy only.
- Along similar lines, a lot of the productivity improvements made possible by the IT revolution have largely passed the healthcare system by. A lot of recordkeeping is still paper-based, despite the promises ten years ago that we would all have our complete histories at the touch of a physician’s PDA.
- The large proportion of jobs, productivity and output that healthcare now represents is reminiscent of the real estate bubble communities such as Las Vegas, here in LA, and Florida, where the majority of new residents coming in were in the construction and real estate industries themselves (or closely tied to it), which created something of a vicious cycle.
- As a culture we have a long way to go to accept true rationing, which seems completely unavoidable (barring the creation of Emergency Medical Holograms). We demand to have all possible measures taken, by expertly trained doctors, immediately. (In nationalization scenarios we can provide all reasonable care, but there are usually significant waits involved.)
- The medical education and licensing world creates an artificial scarcity of doctors. This is perhaps most easily fixed, although we must inject more semi-competent doctors into the system to help out.
A combination of inflation induced by Fed unwinding (a contentious argument but a possibility) and US government cutbacks in the name of solvency could create a wasteland of empty clinics where a simple physical is $5000 (and unaffordable by all but those absurdly rich among us) and emergency patients are kicked out onto the street.
For further reading I am digging into this blog by Bob Laszewski:
Health Care Policy and Marketplace Review
In particular, he has a March guest piece discussing the potential system failure idea.
