U.S. Healthcare implications from COVID

[HALL85]

The way the system works today is that hospitals lose money on Medicare and Medicaid patients. Private pay insurance subsidizes it. If you ship those numbers even more, private pay will become prohibitive and the quality of care will decline.

Once again, problem with our system isn’t how you pay for it but rather what it costs and what those cost drivers are. Address the drivers and you make it more affordable for all.

 

[Merge]

The way the system works today is that hospitals lose money on Medicare and Medicaid patients. Private pay insurance subsidizes it. If you ship those numbers even more, private pay will become prohibitive and the quality of care will decline.

We are well on the way on that path.

Medicare enrollment as a percentage of the population is the highest it has ever been and will continue to increase over the next 10 years as people are living longer and the baby boomer generation continues to become eligible.

Once again, problem with our system isn’t how you pay for it but rather what it costs and what those cost drivers are. Address the drivers and you make it more affordable for all.

No quick fix there. Main driver is how utilization. Not exactly a faucet we can turn off but the trends towards high deductible plans with consumers being more involved in the cost decisions will help but we are in a tough spot where there is a generation of people that will be utilizing a lot of care over the next 20-30 years.

 

[HALL85]

We are well on the way on that path.

Medicare enrollment as a percentage of the population is the highest it has ever been and will continue to increase over the next 10 years as people are living longer and the baby boomer generation continues to become eligible.

No quick fix there. Main driver is how utilization. Not exactly a faucet we can turn off but the trends towards high deductible plans with consumers being more involved in the cost decisions will help but we are in a tough spot where there is a generation of people that will be utilizing a lot of care over the next 20-30 years.

When you think about it, COVID will probably slow that trend as the vast majority of people that have died are over 65; the group that normally consumes 80% of healthcare costs.

The reality though is that we are not going to change our consumption based healthcare system. Playing around with insurance (private pay, Medicare, Medicaid) will have little effect on the cost trajectory. It's like sweeping dirt from one side of the room to the other...still have a dirty floor.

Technology will play a much bigger role in controlling costs. Telemedicine can reach any patient with a smart phone and we are also facing a shortage of physicians, so that will aid in providing care to more people with fewer docs. And we are not that far away from genomic sequencing and real time monitoring. There are a number of companies/organizations pursing all of that. If you look at the healthcare alliance that Amazon, JP Morgan and Berkshire Hathaway have entered; it's not about moving their employees to a government program. It's about providing healthcare to their employees and having a measurable impact.