It’s Juicero innovation at its finest. We’re paying more, way more, than we used to, and yet our outcomes have never been worse.

There is a slowly growing understanding in policy circles that cost is the fundamental challenge to improving America’s human services and infrastructure. The tradeoffs required in American medicine — offering better care or offering more care to more people would simply be moot if the overall cost of health care was 9% of GDP instead of 17.5% — the median percentage in the OECD group of industrialized countries.

All of that innovation has done practically nothing though to fix the single worst problem of modern American health care: it’s cost. Health care in the United States has never been more expensive. The United States is spending about $3.5 trillion a year on health care expenses, an increase of 12,300% since 1960. In that timeframe, health care spending increased from 5% of U.S. GDP to about 17.5% of GDP.

If you are wondering what one of the main drivers of cost disease in health care is, it likely starts with the fact that few hospitals and providers actually know what their costs are except for aggregated numbers. We can cue a facepalm emoji, but the reality is that it is really hard to do this sort of analysis with existing management systems.

It is one thing though to identify the pattern, and it’s another to start to tease out the reasons why costs have spiraled 123x in just a few decades. The pithy answer is that there is no pithy answer: industries like construction and healthcare are simply too complicated to have a simple response to the question of cost disease. It’s literally all the answers and none of them at the same time.

Leave a Comment

Your email address will not be published. Required fields are marked *