Home > Uncategorized > Strained, dysfunctional U.S. medical economy at threshold of a new era

Strained, dysfunctional U.S. medical economy at threshold of a new era

Tom Blue, executive director of the Virginia-based American Academy of Private Physicians, has written a thoughtful and insightful analysis of what ails the current system of medical care and payment in the United States.

Blue’s main points:

  • Health care is the only sector of the U.S. economy where insurance — fundamentally designed to spread and manage the risk of unexpected, catastrophic, and high cost losses — is used to pay for expected and preventative costs.
  • Market forces have been disrupted by the third party payer system and cannot hold down rising medical costs.
  • Consumers want health oriented care — what Blue terms as “functional medicine” — but the current third party reimbursement system is out of alignment, incentivizing payment for multiple procedures to treat sickness rather than promote health.  As an example, Blue points to how diabetes is treated as a syndrome of discrete symptoms rather than as a condition that requires early, holistic intervention.
  • Functional medicine represents the third era of U.S. medical practice.  The first was focused on treating and eradicating infectious disease. The second era began in the 1970s and 1980s with the payer-side driven managed care model that Blue asserts can no longer control costs as intended and largely responsible for medical cost inflation that has outpaced annual GDP growth since 1970.
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