Healthcare is one of the fastest-growing and changing industries in the world. The market analysis estimated the size of this market at $8.45 trillion in 2018, and it has been growing since.
The Healthcare industry consumes over 10% of the Gross Domestic Product (GDP) among the developed countries. It was much higher for the United States, at close to 80% of the entire country's GDP. Over 64% of the country's expenditure targets patient care. Thirty-three percent (33%) and the majority of the healthcare spending is towards Hospital care, followed by physician and clinical services at about 20% of total GDP.
The U.S. alone has the most significant healthcare spending, at $10,224 per capita, ranking the country as the largest spender of healthcare dollars globally.
As the largest employer, the United States spends twice as much as any other developed country does on its healthcare. Indeed, it holds over 784,626 companies in the healthcare sector, McKesson being the most prominent U.S. healthcare company with annual earnings of $208.3 billion.
The question is; why does the U.S. spend more than any other Country on Healthcare?
According to a study published in Policy Advice, the United States' expenditure on treatments and procedures is twice that of other developed countries. The federal government spending reached $433 Billion for Medicaid and children's health and $303 Billion for children's support employment-based coverage for people who do not qualify for Medicare. The congressional budget office, and the Joint Committee on Taxation (JCT), project a net subsidy from the federal government of $1.4 trillion in 2030.
Large corporations in the United States top the country's revenue. As the country's largest healthcare company by revenue, McKesson comfortably holds ahead of its closest rivals, UnitedHealth Group (insurance industry), CVS Health, Amerisource Bergen, and Cardinal Health.
Despite the increasing fiscal burden within the American healthcare system, this country is not alone in the real challenges.
For instance, Germany spends about 10.4% of its GDP on healthcare, yet it has been able to put in place control on various spending. one way to accomplish this is to have a contract with independent medical practices for a service model called "diagnosis-related groups."The program pays for hospital care contingent and limits drug expenditure within the contract statutes. Germany also implemented various managed care programs adapted from the U.S. system.
According to a publication by law, German health insurers do not typically reimburse for services that are deemed unnecessary. Thus, a doctor who provides such services will not be funded.
It seems evident that most other developed countries have, just like the U.S. counterpart, control over what is ordered by physicians and how much services costs.
Germans seem to have fewer and less complex administrative systems. They have stricter control over how much drugs cost and probably have less defensive practices by physicians.
U.S. physicians seem not to be able to keep up with the increasing technology revolution in healthcare, something that the German healthcare community may not have to experience because of the tight government control over the healthcare market.
The Healthcare reality is outlying from simple Cost Control
According to a report backed by the united nations, 3.5 billion people don't have access to essential services worldwide. This number accounts for 50% of the global population. More so, out-of-pocket healthcare expenses force 100 million people to survive on a daily income of $1.90 or less.
Currently, about 800 million individuals spend over 10% of their monthly allotment on healthcare expenses, thus high enough to push them into severe poverty.
To tackle the current healthcare challenges, industry leaders are adapting the internet of things (IoT) to the other prevailing solutions, hoping to slump the costs of operational and clinical inefficiencies by $100 billion per year.
Sixty-four percent (64%) of physicians believe the internet of things (IoT) can help alleviate the physician administrative burden associated with the already rolled out value-based physician reimbursement system. But, IoT requires interconnectedness and interoperability.
About 98% of executives in the pharmaceutical and life science arena predict digital investment in the clinical field in the future. But, Approximately 75% of healthcare facilities are projected to be ad-lib when responding to cyber-attacks and the optimal utility of the new industry disruptors.
In summary, infrastructural revolution is required by the ever reforming healthcare industry if we, indeed, are looking to contain healthcare costs.
The other question is the corporate interest and their covert business strategies that will determine what type of infrastructure and what one should implement cost to patients and physicians.
In 2021 UnitedHealth Group announced $6 billion in revenues in a single quarter. It is assumed that such a jaw-dropping earning was attributed to not paying for health care services. During the same quarter previous year, the company noted its $9.2 billion in profit due to "broad-based deferral of care." That means that the profit "was earned off skipped childhood vaccinations, reduced access to opioid misuse treatment, and avoided emergency care for cardiac arrest. The latter shall serve as one of many strategic pivoting by large corporations to double down on profiteering.
So, a market solely controlled by large corporations such as United Health, Mckesson, and the hospital industry sparks my curiosity about what algorithms they are willing to implement to reduce healthcare costs!
Healthcare needs a Decentralized System Of Infrastructure that is also Collaborative And Transparent
Based on what I described earlier, one can draw one apparent conclusion. No matter how much governments implement cost control, in our globalized world where large corporations are playing the role of the neo-Feudals, the vicious circle of growing healthcare expenses will continue.
The large corporate monopoly and control over the healthcare market is the primary reason for the high healthcare costs worldwide, more so in the United States. Because the U.S. has an increasing number of prominent corporate industry players, their relationship is highly complex. Plus, the constitutional statute in the American system has given entities like United Health the power of lobbying and control over public data. Consequently, large corporations have little or no incentive to be fully interoperable even though they may present their interest in going interoperable with a few chosen large corporations to become interconnected and even share health information. This form of monopoly and their profit-making agenda can never satisfy our trust that they will work "even with the government and healthcare leaders" to lower healthcare costs.
The unpretentious healthcare infrastructure of our time is the one that is transparent and open-source. It is a kind of system that allows every player, regardless of their size and fiscal advantage, to realize, share, and exchange services, data, and products with anyone at any time. Healthcare stakeholders must be able to contribute independently without the worry of losing their intellectual properties. Until healthcare leaders guarantee such a milieu to healthcare space, we will continue facing a vicious circle of artificial elevation of the costs, physician overburden amidst value-based reimbursement policies and an absence of health equity.