As a Citizen I want Healthcare

For as complicated as Healthcare sounds, I think the general gist is relatively simple. If my family or I get hurt or have an illness I want medical help to try to get our life back to a normal place again. Being sick or injured is awful and makes you have to set all of your dreams aside. Insurance is supposed to fix this situation.

In this article I analyze the healthcare system using three tools of product development. I look at it from the perspective of what it should be and come across some ideas for how to get from where we are to a much better place.

What is the problem with healthcare?

Careers have been made on this topic. So to keep it simple I want to point out some disturbing facts about the US healthcare system.

Fact 1: In 2019, personal healthcare spending reached $3.2 trillion in 2019, or $9,770 per person.

Personal healthcare spending reached $3.2 trillion in 2019, or $9,770 per capita.

Most was spent on hospitals (37%), physicians (24%), and prescription drugs (12%). The remainder was spent on other health needs like dental services and nursing care. Data for 2020 is not yet available. - Source USA Facts https://usafacts.org/state-of-the-union/health/

Fact 2: In 2018, 66.5 percent of all bankruptcies were tied to medical issues

“Either because of high costs for care or time out of work. An estimated 530,000 families turn to bankruptcy each year because of medical issues and bills”

Sources:

Fact 3: In 2019, 8% of Americans were uninsured

The percentage of uninsured Americans decreased to 8% in 2019, near the 2017 low of 7.9%.

Insurance coverage varies by race and ethnicity: 16.7% of Hispanic Americans and 9.6% of Black Americans were uninsured in 2019, higher than the national uninsured rate - USA Facts https://usafacts.org/state-of-the-union/health/

Fact 4: In 2020, 45% of citizens are covered by government insurance already

Source: https://www.statista.com/statistics/237043/us-health-care-spending-distribution/

Fact 5: If you pay for your family of 4, expect to pay $1400 per month

Average Annual Premiums

https://www.financialsamurai.com/how-much-should-i-pay-for-healthcare-affordability-ratio/

To summarize Healthcare is too expensive. It is costing more than the average rent to pay for it. For a majority of people healthcare is part of our employment package. This creates a new problem, our jobs are tied to our health and the health of our loved ones. If the North Star of the US is Opportunity, then being forced to keep a job for the fear that you might not be able to cover your family’s medical bills is a pretty obvious roadblock.

To create more opportunity we must have a safety net that provides some safety. Without that we cannot take the risk to innovate and start new businesses.

Three Key Metrics

To identify if the healthcare system is working I propose that there are three key metrics that can be used to measure success. Essentially, our healthcare should cover all of our citizens, with the least financial burden for all of us, and allow us to pursue our happiness as long as possible.

1. Coverage: 90.8% It is assumed that all citizens are covered no matter where they live. This assumes that they have any medical insurance coverage.

Of all of these variables I think this is the easiest to find the exact number I’m looking for. I found it in one great report called the U.S. Health Coverage 2019 from FAS.org.

2. Productivity: 80-18 = 62 years The maximum number of years that a citizen can be productive. Notice this isn’t retirement age. Productive means that you could create a business if you want to. I think of these three variables this is the hardest to measure. I would argue that you have from 18 until you are in a care facility to do what you can in this world. Thus that is the maximum number of years.

I’m basing productivity from starting at 18 and going until people are admitted into a nursing home facility. I’m not saying that people work all of those years, but I am saying that is the number of years you have to live and do what you want to do.

Fact: 80 is the average age of admission for women in long-term care settings.

I admit this isn’t a strong source and I don’t know where the author cited the information. However, I have had a pretty hard time finding an average age for a long term care facility. I believe that a lot of work can be done to simply capture this information correctly.

Source: https://www.morningstar.com/articles/957487/must-know-statistics-about-long-term-care-2019-edition

3. Cost per citizen: $912.30/month The least amount of costs per citizen per month. I want this measured in months because it is a number we all can relate to. Our car payments are in months, our credit cards demand payment by the month, thus let’s look at this on the same terms.

Simply pulled the numbers from the coverage report and summed them to get a total cost for the nation, then divided it by the total number of citizens in 2019. I do think this is a very crude number and can be refined. For example not everyone pays for private insurance. And for those on group insurance the cost is probably hidden behind the job.

Source: U.S. Health Coverage FAS.org: 2019

Applying the tools of Product Management When developing a product I have found that I have a set of tools that I always lean on. These are very helpful when taking a complex subject and breaking it down into its component parts. In this next section I will use these tools to illustrate how this can be done.

Tool 1: North Star Metrics : Cost Per Citizen

There are so many issues that it is easy to get turned around in the healthcare landscape. This is where a North Star metric is useful. With a North Star metric you pick ONE metric to measure that represents success. As long as that metric is moving in the right direction you know you are making the right changes. It must be a measurable quantity that is simple enough for everyone to understand. Understanding this metric is key so that when different entities make decisions, they are choosing to align themselves with the same metric.

Previously we proposed that the North Star of the US is providing opportunity. I would then believe that the North Star of Healthcare needs to support giving United States citizens more opportunities. This Cost Per Citizen is what I am looking for and as of 2019 it was $912.30/month.

I want to point out that the cost associated with healthcare is not clear. In many cases the costs are what are paid out of pocket for individual healthcare from a marketplace. This ignores the costs that every employee pays toward medicare, medicaid, taxes for subsidies, copays, and deductibles. What I want to know is how much are we collectively paying toward our own healthcare and everyone else’s every month? There is a lot of room for improvement on this data but it is the right metric to be watching.

Tool 2: User Stories

Healthcare is confusing, emotional, and expensive. If we back away from all of that and imagine what we want out of the system. I find that user stories are a very useful tool for cutting through the clutter and stepping back to view a system from a much more objective perspective. Essentially you have to ask yourself, “What is it that I want from this product?”. When I did this exercise I ended up with this set of user stories.

Citizen User Stories

As a Citizen I want to be be taken care of when I am sick or hurt
As a Citizen I want to know my loved ones will be taken care of
As a Citizen I do not want my families medical needs dependent to my career
As a Citizen I want to make informed decisions about my medical situation
As a Citizen I want to pay a fixed amount so my life isn’t wrecked when I get sick or hurt
As a Citizen I am willing to pay extra so that I feel even safer
As a Citizen I want my medical information kept private

Medical Provider User Stories

As a Medical Provider I want to help people recover from illness and injury
As a Medical Provider I want to help people prevent illness and injury
As a Medical Provider I want to help people make informed decisions about their medical situation

In performing this exercise I realized how simple healthcare is from the perspective of a patient. Essentially you don’t want to think about it. You just want it to be there when you need it.

Tool 3: Objectives and Key Results The OKR framework is a fantastic way to plot a course of action through complex problems. Essentially you work toward your North Star by routinely describing objectives and the quantitative way that you expect to measure them. Below I have listed out the first few legs of the journey that I see as progress toward a system that fits the ideal end state for healthcare.

Phase 1 : Calculate the true costs of healthcare

For the first leg of the journey, I believe that we would want to make sure our data we are making decisions on is accurate, timely, and cited. The end result would be a national dashboard for all to see.

Objective 1: Make the cost of healthcare transparent
- Key Result 1: Make the costs of all medical procedures transparent
- Key Result 2: Make all insurance entities submit pricing for every medical procedure
- Key Result 3: Make all costs associated with government healthcare visible
Objective 2: Track the overhead of every entity providing healthcare services
- Key Result 1: Make profits and losses for health insurance companies visible
- Key Result 2: Make financials for Medicare, Medicaid, and other government healthcare programs visible
- Key Result 3: Make the overhead from all healthcare entities known
Objective 3: Calculate the healthcare costs for each citizen
- Key Result 1: Provide each citizen with a report of how much they are paying for healthcare via their employer, and government programs
- Key Result 2: Provide each citizen with a report of how much they have been paid back from their healthcare
- Key Result 3: Provide a dashboard that displays coverage and cost that can be viewed through a lens of income level, age, and location

Phase 2 : Get to full coverage while reducing the cost

Assuming the data is good, the goal then becomes to iterate and try ways to improve the process. This outcome specific goal will force new ideas to the surface to accomplish the task.

Objective 1: Reduce the cost of healthcare
- Key Result 1: Reduce the overhead at the insurance companies by 10% each year until it is a 3% margin
- Key Result 2: Increase innovation in healthcare
Objective 2: Make healthcare available for everyone
- Key Result 1: Number of citizens who have health insurance

Conclusion : Healthcare as a product

I don’t see why the collective healthcare system cannot be treated as a product that all citizens can enjoy. It allows freedom and liberty for all US citizens. It also allows us to manage other thorny issues at scale. For example, if mental health was a key part of healthcare then providing homeless populations that suffer from mental illness healthcare coverage would reduce the burden the homeless population puts on emergency services. It would also reduce crime in areas.

We should also error on the side of generosity. If we have visitors who are not from the US using the system because they were injured or sick, then help them. But also track how much we are spending to help them. If for no other reason than to show how it compares in the grand scheme of our healthcare system.

I did want to suggest a few ideas that I came up with while writing this. I believe these are possible changes that could have a big impact.

Idea 1: Make medical coding data transparent

A lot of financial data is tracked around each medical procedure. This falls into a body of work called “Medical Coding”. There are several systems that track each type of procedure and the negotiated rate between a healthcare provider and insurance carrier. This information should be transparent. There is no way to know the price of anything in this market if the prices are always hidden.

Idea 2: Open Standards for Medical Coding.

I believe that governments have a public duty to supply the standards that an industry organizes around. We have an entire government group around standards, https://www.nist.gov/ , so why doesn’t their charter include the standards we use to itemize medical procedures. Simplifying the data and standardizing it would be an immediate boost for reducing the technology costs.

Idea 1: Insurance carrier contest

Instead of focusing on private vs public solutions, I wanted to point out that we could use both systems to reduce the overall cost of healthcare for the citizens of the US. Essentially have the government pay the insurance companies on our collective behalf.

The way this would work is that we establish a fund and award 60% to the carrier who can provide the best coverage for the lowest price. Second place would get 25% and third place would get 15%. In this way we can cover all citizens very soon. It also would immediately not make U.S. citizens dependent on their jobs to pay for insurance.

What is next?

I learned a lot in writing this article. I didn’t think I would have such a challenging time finding data and calculating some of these numbers. As it turns out you really have to dig. I am also not too happy with my sources and question some of the accuracy. The data I had to pull from was in 2019 so I’m not even sure if it is the same. This points to a different problem, data. I believe that in order to make good decisions we need good data. For that reason, I will be writing an article about Data as a Public Utility.