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Healthcare Profitability – Changing the Model

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Our Current Healthcare Model

We assume that the doctors, hospitals, and all of the associated administration (health insurance, standard practices and procedures, etc.) of how we receive medical care is altruistic in nature.  We think that it is driven by the fundamental and core belief that the industry, as a whole, desires nothing more than to help the sick or injured or dying, to relieve human suffering and discomfort using the best of their accumulated knowledge. Additionally, when possible, we cling to the belief that they desire to offer a cure or solution that negates any and all negative health outcomes, including death, or at the very least to provide an environment that fosters dignity, respect, and comfort throughout the dying process.

All of this is true at a fundamental level of belief.

However, we should all also realize, but many of us don’t, that the current model that drives the healthcare industry is one of profitability, just the same as in any other industry.

A manufacturing company produces a product.  They combine raw materials of some sort, and after their processing system is complete, a finished product rolls off the conveyor belt at the end of the line, ready for consumption or use.  The goal of that manufacturer, in this example, is to produce a product that consumers want or need, at a price point that is acceptable, in such a quantity that it is available, and in such a location that it is easily accessible.

Healthcare as a Business

This model is not unique to manufacturers or service companies.  In fact, it is just as applicable to, say, a hospital, or for that matter, the entire healthcare industry.

Consider a hospital for just a minute.  What is their product?

You know as well as I do that it’s administering treatments, medications, and supervising the care of the people who need it.

Right?

They achieve this by having expert staff (doctors, nurses, and other staff) available, and by having modern equipment available for treatment and procedures, which consumers find convenient and absolutely essential.  They have a centralized location in most areas or a good distribution system, which gives accessibility to the consumers of their “products,” and usually can provide whatever quantity of care (for example: length of hospital stay, drugs, observation, surgeries, treatments, or other care) anyone needs.

Perhaps the only things in the production cycle of a hospital from admission to release that really differ from a standard manufacturing cycle are the mechanisms that influence cost.  To really understand that aspect, you would have to embrace a much more custom-designed and consumer input-oriented, and certainly circumstance-driven product to compare to a hospital product cycle.

Just like any business, hospitals must continually investigate every angle of their products.  They must look at how much “health” they are producing for their customers relative to overhead costs, and to determine whether or not their business model is producing a sufficient and sustainable profit.

Therein lies the conflict.

Finding a Sustainable Path

How do you uphold the altruistic core principles of medicine while making a profit?

Perhaps we should first discuss what is an acceptable profit.

As more and more procedures and medications have come into play in recent years, promising relief and cures, there has been a corresponding increase in demand for the these things.  It makes sense that people would want to take advantage of these new interventions regarding their health to live longer, healthier, and higher quality lives.  Yet these factors are what has been contributing in large part to the increase in health care costs.  Of course, there is accusation of unnecessary profit-grabbing from the health industry, which is rumored to be true, and probably is.  But the biggest driver of cost of any product or service has always been an increase in demand relative to an availability of supply.

It’s basic macroeconomics at work.

In any regard, the availability of new treatments does not come at a minor cost, and it significantly has eaten away at the profit margins of the medical services industry.  When you add in the millions of people that haven’t had any health coverage that need medical intervention, a growing senior population, and the poor, and when you understand that hospitals usually treat these people with the expectation of receiving little or no reimbursement for their care, the profit margins narrow considerably further.

Bottom line results of hospitals are further burdened by the cost of salaries, buildings, maintenance, and the many specialized and extraordinary overhead costs, like legal fees and ongoing capital expenditures for facility and equipment improvements.

Now consider the people that need these medical services for a minute.  They are the raw material for their manufacturing process, so to speak.

Hospitals need patients to produce a profit as much as a car manufacturer needs aluminum to make their cars.  Their entire product life cycle depends on them.  Without them, their business model cannot exist.

So they are driven to come up with new procedures, treatments, and interventions to sustain and increase revenues to keep paying the bills.  They are forced to do the same thing as any business; find the latest and the greatest and sell, sell, sell!  It may also cause them to recommend treatments that aren’t necessary to drive up their profitability.  They may devise what could be considered devious and unscrupulous methods of bringing in new patients, taking advantage of the newest research findings to persuade people who can afford to pay their way to seek the promise of their care.  Or they may take advantage of lower rungs in the medical treatment value chain, funneling patients into their facilities from primary care physicians that are all part of the same paradigm.  This can have severe and far reaching consequences for the the people receiving the products and services that hospitals offer.

After all, the same way that manufacturers of an electronic product want to keep their current customers coming back for more, while expanding their customer base, also applies to hospitals and the medical field in general.  Why should they feel obligated to fully cure ANYBODY at all, when their business model demands an infinite number of people with an infinite number of problems?  They don’t!  No, just like business enterprises of all kinds, built-in obsolescence is the order of the day and is firmly entrenched.

It is a cycle that promotes sustained disease, and not one that promotes sustained health.

A New Challenge for Healthcare

So, what can be done, if anything to change all of this?

I think the question we have to now ask the healthcare industry is how can they take the current circle of causality which continues to grind away with huge planetary, societal, economic, and health consequences, and find a path that reverses their course, gets back to their core values, does not negatively impact on professional function and motivation, helps more people at lower cost, and provides adequate growth and profitability?  In short, how can they find a balance between economic sustainability and suitably ethical and positive medical outcomes in their business model?  Where is that ideal market clearing point, for those with economic insight, if one exists?

No problem, right?

Medicine is concentrated on servicing the effects of poor health or conditions brought on by circumstances within or outside of the control of most people.  But changing to a plant-based diet could impact on the amount of services people need now and in the future, relegating at least chronic disease, and perhaps a great number of other conditions, to a chapter in future students’ history books.

A Vision of Future Healthcare

What if hospitals of the future employed plant-based professionals who intervened in health conditions primarily with nutrition?  Imagine a plant-based ward, instead of a cancer ward, where people detoxified their bodies by eating a whole foods, plant-based diet, guided by these professionals, and avoiding most surgical and pharmacological treatment.  What if the very need for large hospitals in the future were unnecessary?  If heart disease, diabetes, and cancer no longer existed or existed in very small numbers compared with today, how many specialists in these fields would we need?  What if nutrition as a new primary treatment for disease became the accepted way of doing things?

In the future, could there be a nutrition clinic on every neighborhood, or in every mall, or in every shopping center, the way we find fast food outlets and coffee shops now?  And these centers would offer counseling in eating a healthy diet, have cooking classes, teach people how to shop for whole foods regardless of their socioeconomic station in life. They would offer ongoing care to those who don’t have healthy dietary habits for one reason or another and have contracted a now RARE chronic disease.

True, there might be less need for cardiovascular surgeons, and many other highly paid positions, but look at what the world would be gaining!  A better way of treating disease, and at a greatly reduced cost to individuals, to our economy, and to our society.

Sounds like the ticket to sustainability to me!

Let’s help the healthcare industry make the leap to a new paradigm by eating a whole foods, plant-based diet and recommending others to do the same.  Who knows what could happen?

Happy plant-based living and eating!



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