We’re Having the Wrong Discussion About Healthcare

The real problem to fix is scarcity - and, now, it can be fixed

At about 9 AM on Dec. 4, I walked down the Sixth Avenue sidewalk right across the front of the New York Hilton hotel. It occurred to me that quite a few cops were casually standing around the entrance and chatting. I thought I heard one of them say the word “shooting,” but, you know, it’s New York. I just kept walking. About an hour later, I first saw the news that UnitedHealthcare CEO Brian Thompson had been murdered around the corner, on the 54th Street side of the Hilton, early that morning.

My first thought was similar to what came pouring out of social media soon after: that there are an enormous number of people who would have reason to hate UnitedHealthcare, or any health insurance company. Of course, violence should never be the response to anything. The shooting was a horrific crime. But it’s striking to see how easy it was to imagine the motive.

There’s been a flood of commentary since Thompson’s murder about the need to fix healthcare. Of course it needs to be fixed – our system is frustrating, expensive and bizarre. And yet, most of the commentary seems to be about how to better pay for or manage that same system. (Like: Medicare Advantage for all! Whoopee!)

It’s not the right discussion.

Hardly anyone seems to recognize a superbly simple root problem – which is important, because the problem suggests a solution.

Why do I know anything about this? I’ve played a small role in an effort to try to dramatically change the healthcare experience in ways that stand a chance of making it much better. In 2019, I worked on a book with Hemant Taneja, CEO of VC firm General Catalyst, and Stephen Klasko, who had been CEO of Jefferson Health in Philadelphia. UnHealthcare: A Manifesto for Health Assurance was published in May of 2020. Jefferson is a major hospital system. General Catalyst is probably the single biggest venture investor in health technology companies. It also is in the process of buying an Ohio hospital system, where some of the technology GC has helped fund can be deployed.

The simple root problem we saw is scarcity.

It’s actually a straightforward observation, once you think about it. Healthcare is a very physical, analog industry. There will only ever be so many doctors, nurses, hospitals, clinics, etc. The supply is limited and hard to expand.

On the other side are all of us – and human nature. We all want to be as healthy as possible. No one wants to be sick or hurting. So most of us would consume all the healthcare we could get. Think of it this way: if you had a fully-equipped doctor’s office next door, and you could walk in anytime unannounced and everything was free, wouldn’t you be in there every time you had a cough or a pain or just wanted to be reassured that your blood pressure or cholesterol was OK?

Therein lies the tension. The supply of healthcare is wildly limited compared to the potential demand for it. The gulf between the two is vast.

Health insurers like UnitedHealthcare wind up in the middle of this. Their job is to manage the gulf between supply and demand.

One way they do that is by keeping you from using all the healthcare you’d want – maybe by requiring authorizations, or refusing to cover stuff, or with high deductibles. On the flip side, as economics 101 tells us, low supply and great demand leads to extraordinarily high prices. Health insurers try to manage that by negotiating prices with healthcare providers and, supposedly, protecting individuals from going broke when we need a lot of care. (Whether health insurers manage this gulf responsibly is a whole other discussion. Allowing them to be for-profit creates incentives for them to manage it in THEIR best interests, not in the interests of patients or healthcare professionals.)

Much of what frustrates us about healthcare spins out of the scarcity problem – long waits for a doctor’s appointment, hospitals that charge a fortune even for a bandage, doctors and nurses that get turned into gruff robots because they have to see so many patients in a day. And, of course, sky-high insurance rates.

Now, imagine what might happen if the gap between supply and demand could get dramatically smaller.

Doctors and hospitals would have to compete for your care. Prices would come down and the experience would get better and easier. You’d use routine healthcare more often which would help you stay healthier, and then you’d be less likely to need expensive critical care. Health insurers would have less incentive to get in your way and rates would fall. The nation as a whole would likely be healthier and spend less of its GDP on healthcare.

The problem, of course, has always been the difficulty of increasing supply to the point where it meets demand. That’s because of the physical, analog nature of healthcare.

But here’s what’s different now: new technologies, including artificial intelligence, genomics and robotics, are starting to get good enough to be able to narrow the gap.

When healthcare capabilities become digital, they can be inexpensively scaled. As we noted in UnHealthcare: “Healthcare should be as easy to access as Google Maps. Instead of trudging to a store to pay money for a physical map that can only be printed in limited quantities, every person on earth can tap a phone screen and get a map instantly for free… and that map even has GPS that routes you around traffic jams. It’s time for healthcare to transform from scarcity to abundance through technology.”

How would that work? It’s feasible, for example, that an AI bot could ingest your medical history and have access to the entire universe of medical literature, and act as a kind of pre-doctor app in your pocket. The more you use it, the better it will know you. You’d be able to verbally talk with it, or take pictures or video of that thing on your arm that you want it to look at. It would almost be like that doctor next door, and using it as a health advisor could help you stay healthier or get problems treated sooner, before they get bad and expensive.

Yes, there’s a lot about that to still work out, including privacy concerns and the line between what an AI can advise before it has to refer you to a doctor. (But then, if you need to talk to a doctor, it could happen virtually, making doctors more easily available and cutting down the costs of maintaining doctors’ offices.) But it’s coming. If you want to glimpse an early version of what such technology can become, check out a startup called Hippocratic AI.

Other tech companies are coming at the scarcity problem from many other angles. One of the better known is Livongo, which uses AI backed up by human health professionals to give people with diabetes a kind of personal advisor about their condition. It’s proven to lower the cost of care for people with diabetes while helping them manage their condition and live life better.

This is just beginning, but the promise is real. Already, studies have shown that AI can sometimes diagnose better than human doctors. That’s no rap on doctors – but when faced with difficult, rare cases, AI can search all medical literature ever published. No doctor can know all that. Some surgeries are already performed by robots with a doctor overseeing. Certainly a day will come when robots can autonomously take care of some medical issues, freeing up more of doctors’ time to handle more challenging issues and provide a human touch.

If technology can increasingly handle the more mundane medical care, doctors’ time becomes more abundant. If technology brings inexpensive, easy medical help into our daily lives, more people will stay healthier, which means they won’t need to go to doctor’s offices or hospitals, and that will free up even more healthcare services, so they become more abundant for those who truly need them.

You may think this sounds like science-fiction, but from what I’ve seen, it’s all possible. America will increasingly have the ability to make healthcare more abundant, narrowing the gap between supply and demand.

A lot of entrenched interests will fight it. Policymakers will have to wrestle with it. But ultimately, making good healthcare much less scarce is a more promising way to “fix” healthcare than just trying to better manage our existing system.

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Here is the first part of the Introduction to UnHealthcare:

In the best of all worlds, healthcare would not exist.

If our bodies and minds stayed healthy until the day we suddenly expired, we would happily do without doctors, pills, hospitals and insurance companies.

The next-best thing would be to have a system designed to help us need as little healthcare as possible – to help us mostly forget about doctors, pills, hospitals and insurance companies. True “health care,” even for the chronically ill, would disappear into our everyday lives, helping us stay as well as possible without having to think too much about our health.

Such a system would be new and different. It would be health assurance.

This is what entrepreneurs and innovators are starting to build: a radically new kind of experience that works as easily as most of our other consumer experiences. It promises to shift healthcare from its current irrational economics to more rational, free-market economics. That shift can drive costs down while improving outcomes – better health, more empathy, fewer mistakes, less frustration.

Everyone wants to “fix” healthcare – even people who work in healthcare. The best way is to encourage hundreds or thousands of new companies and inventions to bloom. That is far better than any program or legislation that only finds another way to pay for our broken, expensive, frustrating healthcare industry.

Healthcare should be as easy to access as Google Maps. Today’s system is built around the concept of scarcity – that there are not enough physicians, hospital beds, medical devices or drugs to go around, so these things have to be expensive and a pain to get. By contrast, most other industries have by now transformed from scarcity to abundance: Instead of trudging to a store to pay money for a physical map that can only be printed in limited quantities, every person on earth can tap a phone screen and get a map instantly for free… and that map even has GPS that routes you around traffic jams. It’s time for healthcare to transform from scarcity to abundance through technology.

It is ridiculous that you have to use a telephone to get a doctor’s appointment two weeks out even though you can buy a car in ten minutes through an app and have it delivered to your driveway. We’ve reinvented commerce, community and content online. Now it’s time to reinvent care.

We need builders and innovators to partner with healthcare professionals to transform the industry so it stops making us conform to it – and instead makes care conform to us. It’s the difference between retailers of the last century making you drive to their stores to look for a product they may not carry, walk their aisles and stand in line at a cash register versus Amazon getting to know you and giving you a personalized store anywhere on any device at any time.

Technology developed over the past dozen years – mobile phones, cloud, artificial intelligence and much more – creates forces no industry can evade, and that includes healthcare. To see the early outlines of a new model, look to startups such as Livongo (an AI-driven model for chronic care), Commure (a platform for medical applications) and some familiar direct-to-consumer companies like Warby Parker (prescription glasses bought online) and Ro (online erectile dysfunction drugs). The richest players in technology – Apple, Amazon, Google,

Microsoft – are investing heavily in this space, and so many more startups and innovations are coming.

This new model will be so different from the old one that we shouldn’t even call it healthcare. That label is tied to the past, and a misnomer. Anyone in the healthcare industry will tell you that they’re really in a “sick care” industry designed primarily to handle people only after they’ve developed problems.

The term health assurance captures the new spirit: easy access to services and technology aimed at ensuring we stay well, so we need as little “sick care” as possible.

Every politician, doctor, healthcare industry executive, employer, entrepreneur and consumer should embrace health assurance, which promises to be more profitable, more efficient, more sustainable and more cost-effective than today’s healthcare – and infinitely better for consumers.

The health assurance space will give birth to ten to fifteen $100-billion companies. The $3 trillion in annual health spending in the U.S. will shrink and be captured by these new companies. The most successful of them will come from creative partnerships between technology companies and professionals in traditional healthcare. The quicker the two worlds merge, the sooner we will stop wasting time on overly-complicated ways to give people access to a fragmented, expensive and inequitable healthcare system.

It’s not productive to blame the vast majority of people in healthcare. They are often frustrated by a system that is fundamentally broken. Most of them want to be part of the solution from inside as entrepreneurs and technologists drive change from outside.

In the Twentieth Century, we built a mass-production model of health care that was right for its time. It scaled up and delivered healthcare to an exploding population, reflecting a fundamental belief in much of the world that even the poorest people should have access to care. That scaled-up model improved the average lifespan in the U.S. from 70 in 1960 to nearly 80 today.

But our model is past its prime and becoming its own worst enemy, and the consequences of not transforming to a new model are dire.

Most debates about healthcare among U.S. politicians talk about the best ways to afford the old healthcare system. But who pays – the government, consumers or employers – is the wrong question. The right question is: How do we enable risk-takers in technology and healthcare to partner and create a transformative approach to lifelong health for all?

Of course, there are enormous obstacles to overcome. But our healthcare system is already in a downward spiral of shrinking margins and exploding costs. Trying to fix it would be like putting a coat of paint on a crumbling building.

Getting there is what this call to action is about, and why we found ourselves working together to start new-era health assurance companies.

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