Sunday, November 09, 2008


US spending on Health Care was over $2 trillion in 2006, and has been rising sharply for many years. According to Kaiser, "recent rapid cost growth, coupled with an overall economic slowdown and rising federal deficit, is placing great strains on the systems we use to finance health care, including private employer-sponsored health insurance coverage and public insurance programs such as Medicare and Medicaid. Since the year 2000, employer-sponsored health coverage premiums have increased by 87 percent." (My emphasis.)

There are various plans to reduce this spiralling cost; some are discussed at the website linked above. They include group health plans, government regulation and improvements in efficiency. The latter includes streamlining services and developing 'algorithms" which provide the fastest (most efficient) diagnosis and treatments. None of these plans take into account the major cause of rising health care costs, which is that health care companies are private, and have to make money for their shareholders every quarter, or they will go out of business.

I work in healthcare, for a private company. Before I go any further, let me say I always do what my company tells me to do, unless it's against the law, which it hasn't been so far. Mostly this doesn't bother my conscience at all. What's good for my company is good for me, since they pay me.

We had a trainining session on the protection of intellectual property. "Intellectual property" means "something the company knows that is worth money as long as no one else knows it". Examples are the formula for Coca-Cola and the ingredients of Big Mac Special Sauce. One major leakage of intellectual property is through vendors. Someone who sells us something may ask, "How exactly do you use our product? If you tell us how you use it, we can tailor it so it's better for you."

Stop, said the trainer. If they know how we use their product, the vendor could easily disclose this information to our rivals, either by accident or for money. This type of discussion should only take place under a non-disclosure agreement, an NDA. This is a standard practice in all industries, and frankly, isn't new to me or to anyone else. Okay, done, training session over.

But there was something in the way it was said. "If you tell the vendor the steps you took to optimize their product for use, you're disclosing information that cost the company money and time to produce. If a rival gains that knowledge without having to spend the time and cash, then we are reducing costs to our rivals."

Saying the magic words "reducing cost" tripped a switch in my mind. I did not hear that passage as an employee of a publicly traded company. I heard it as a patient, and as a patient that has had to spend a lot of money paying for the extremely high cost of healthcare in the USA. It came out quite flatly to me: "It is in our interest to increase the cost of healthcare."

Our company prides itself on patient care, and I'm sure if I mentioned this perception to management they'd say that the message was that rivals would be discouraged, only we would offer that particular service, no costs would increase and everybody would be happy.

Yeah, sure. But looking at it another way, under current laws regarding intellectual property, and under current standard practices regarding intellectual property, it is in a company's best interest to keep even the most minor, low-grade discoveries quiet in the hopes of increasing the costs to everyone else.

Healthcare really is too important to be left to private companies.

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