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How private sector innovations can improve health care

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Nobody disagrees that demographic shifts in America portend a serious reckoning for critical programs for senior citizens like Social Security and Medicare. Census data for 2017 show there are 25 people age 65 years and older for every 100 people in the workforce – the people who pay into Social Security and Medicare. The number of retirees climbs to 35 for every 100 workers by 2030, and 42 retirees per 100 people in the workforce by 2060. 

This is a sobering trend that will significantly affect Social Security and Medicare funding. The impact is particularly troubling in terms of providing health care to seniors. When we combine the growing number of retirees over the next 40 years with the fact that seniors consume more health care services than any other age group, the need to be innovative in improving health care delivery becomes apparent.

{mosads}However, change requires disruption of the status quo for a variety of players, including some health care providers. That’s one reason that reform of the health care system has been so difficult to achieve.

One hopeful sign is the recent joint health care initiative by Amazon, Berkshire-Hathaway and JP Morgan to improve the efficiency and quality of care for an estimated 840,000 employees of the three companies. While there are plenty of details to iron out, the fact that these corporate giants are looking for solutions is encouraging if not inspiring. Employers have a considerable stake in private sector health care and they can serve as key drivers of reform and laboratories for innovation.

It is an inescapable reality of health care that paperwork consumes a lot of time and costs a lot of money to administer. Given the sizable bureaucracy associated with providing Medicare and other health services, it makes sense that finding ways to streamline health care delivery, consistent with proper oversight to prevent fraud and abuse, can also provide significant savings. 

One such streamlining idea involves the proposed acquisition by CVS Health of Aetna. CVS Health has more than 9,000 facilities across America and by merging with Aetna, the third largest health insurance provider in the nation, there’s hopefully a good opportunity to improve day-to-day health care and patient wellness by integrating acute care services, pharmacy, retail and a health plan. This integrated approach to care, combined with neighborhood access to care could prove a potent combination in making sure people are more successful in managing their personal care and health. In addition, it could prove valuable at tackling the costliest problems for the health care system, such as effectively managing chronic disease.

These are not the only illustrations of how private sector approaches to health care can improve services. Consider Medicare Advantage, a public-private arrangement for providing health services to seniors. While enrollment in the program has steadily increased, consumer satisfaction with Medicare Advantage remains quite high according a June 21 J.D. Power survey. Of course there’s room for improvement in any large enterprise and Medicare Advantage is no exception. But the fact that customer satisfaction remains high even while the program serves more and more seniors every year shows how well the program is running.

Good health management often means taking care of the little things early, before they turn into big things later on. It is these little things that programs like Medicare Advantage, CVS Health-Aetna, and the Amazon/Berkshire/JP Morgan plan can address in effective and valuable ways.

But these changes won’t be easy. Those who benefit from the status quo will try to use government to preserve their advantage by using their political power to hold back change. 

These entrenched interests may be aided by those who see government as the answer to our health care challenges. But Ronald Reagan said it best in his quip, “Government is not the solution to our problem; government is the problem.” While Reagan’s quote was directed specifically at the economic woes of the early 1980s, it’s an apt observation for what ails our health care system today. 

The reality of these demographic changes is clear. The health care models that worked in the past cannot be relied upon to work in the future, particularly when the stakes are so high for so many seniors. We need innovation in health care and we need to look to the private sector to lead the way.

James Martin is the founder and chairman of the 60 Plus Association. 


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