Updated: Mar 22, 2020
In reference to the last Positive Parivartan blog entry the social issue healthcare is going to be addressed about the consequences of the way moneys flow within the healthcare systems worldwide.
Governing these social problems fair and efficiently seem impossible, due to the "uncertainty of demand, imperfect consumer information and externalities" in the system, as described in Sheila Smith and Julian Le Grand's The Economics of Social Problems. They base the main source of inefficiencies in the hidden moral hazards. Economists call this adverse selection.
Matthias Muellenbeck had an idea on how to govern the healthcare system and gave a TED Talk with the title: "What if we paid doctors to keep people healthy?". He states that "30% of all surgical procedures were conducted although other nonsurgical treatment options had not been fully exploited".
In his blog, Ashwin Naik, a Healthcare Entrepreneur, explains, that Li Shizhen, a proponent of Neo-Confucianism, believed that 'cur[ing] disease[s] is like waiting until one is thirsty before digging a well'. During this time Li Shizhen explains, that 'the doctor would be paid as long as the patient was healthy.'
Ashwin Naik describes the ancient healthcare system in China: "If they went about their normal daily life free of pain and protected from disease then the doctor would receive money. Think of it along the lines of a monthly retainer for a modern professional to look after your finances, for example. But if the patient became ill then the payment would stop. The doctor would still be under a contract to look after the patient, but they would not be paid again until the patient was healthy."
Positive Parivartan strongly believes that interests must be aligned for there to be progress. No business case can be feasible for any business on the eradication of a disease. Eradication of a disease for the healthcare industry means lack of treatment and lack of treatment causes annihilation of revenue streams.
For provocation: are we sure humans couldn't find cures for cancer, cardiovascular diseases and other global causes of death?
Currently stakeholders are not being incentivized to keep people healthy. Bluntly this means, it is in their interest to keep people ill. Longterm diseases make these businesses, such as pharmaceutical companies, medical device companies, doctors and hospitals very profitable.
Of course, this is presented in a black and white matter, and not all companies fall into this spectrum, but this radical demonstration is to illustrate the impact that the direction of interests and incentives are causing.
In order to change the world for the better, we need to align interests of stakeholders in the healthcare system with the patient's interests.
The cause of this worlds' miserliness lie in the way monies flow and interests are misaligned. No one should be benefiting from the dis-ease of people. Governing leaders need to take inspiration from the ancient Chinese medicine.
It is important to emphasize that the integration of healthcare into the economic system is key for the sustainability of its working. Having Non-Profits responsible for service of health, will be a grave mistake due to the expected decrease in efficiencies and innovation caused by the Non-Profit environment.
The creation of social businesses and social entrepreneurs are a good example on how interests can be aligned. In UK there are companies, that are compensating hospitals to balance the reduction in revenues via distant treatments. Innovative insurance companies are incentivizing patients to take care of their health with free health monitoring products.
Governments should target to increase the market size of preventative business, rather than the cure and treatment business. This can be done through regulations, taxation, subsidizations or provisions.
If patients and healthcare providers can both work in the same direction then it is more realistic to assume that the number of ill patients will reduce and with that diseases can extinguish.
This thinking has to be applied to other social issues as well.
Let's rethink, what are we all working for? What is my impact to the world?
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