Ian Morrison

I was always taught that America spends too much on healthcare and we could reallocate resources to cover the uninsured, increase wellness and health promotion activities, and improve the quality of clinical care. That may well be true, but, as we have found out over the last thirty years it is simply impossible to achieve in the American political context. To reallocate requires someone’s income has to go down, not going to happen.

In my rattling around American healthcare I have come to realize that the only thing that unites doctors, hospitals, drug companies, the elderly, academic medical centers, the safety net, the public health community, health plans and medical equipment manufacturers is that they all want more money spent on them. So that’s the answer, let’s build a coalition of all the actors who want MORE. Can you imagine drug companies, doctors, hospitals and the AARP unleashing their enormous lobbying power, marching arm in arm to the Capitol singing kumbaya?

Here’s how it would work. Let’s assume we are spending $1.5 trillion on health care this year and it’s about 15% of a $10 trillion economy. The new MORE coalition demands that we increase health spending immediately by 20 percent, approximately $300 billion a year, and we make it a national goal to have healthcare account for 20% of GNP within five years (or two trillion in today’s dollars). Hey we will be there anyway in 2020 so why not start now, we need the practice.

How would we spend the money? We would pay people to eliminate disparities and variation in healthcare. We would cover prescription drugs. We would improve long term care. We would cover the uninsured. We would invest in public health infrastructure and we would embark on redesigning healthcare finance and delivery from the ground up for when we baby boomers really need it, twenty years from now.

If we spend two-thirds of the increment on labor costs that’s $200 billion worth of new jobs. You could have half a million jobs at $100,000 a year, 2 million at $50,000 and 2 million jobs at $25,000 a year. Or you could give invasive cardiologists a big raise.

Ok, you’ve spotted the problem, where does the money come from? Let’s assume there are 100 million tax-paying households (there’s actually more, but I don’t know how to work the calculator on my laptop so the math is easier this way). Ultimately, they pay whether in taxes, as part of wages, or as out of pocket costs. It comes to about $15,000 per household already spent on healthcare by all the actors (business, government, and households), we are just asking for $3,000 more per household per year. The top third of households by income would pay for the bottom third ($6,000 versus zero), seems fair. What else would you spend it on anyway, Britney Spears albums and dinner out.

Crazy idea, eh? No crazier than spending $1.5 trillion on a system of uneven quality and huge disparities , having 40 million uninsured, and nobody doing anything meaningful about it.

Ian Morrison is an author, consultant and futurist based in Menlo Park, California. This column was published in the June/July 2002 Health Forum Journal .

We often compress the future. We look ahead, see a large, inevitable future, and presume it is close. I have called this premature extrapolation. It is part of a larger problem in long-term forecasting and strategy development: we lack discipline even about the emerging reality. More specifically, we fail to distinguish between the median (the mainstream or the norm) and the edge (the 3 percent early adopters, leaders, harbingers, or just plain flakes who may or may not become the median of the future).

You see it in corporate strategy: early adopters are assumed to be mainstream, and corporate bets are made as if those early adopters represent the norm. The new, new thing takes on an air of inevitability as the mainstream even though it has hardly begun. (Broadband to the home is a good example.)

In health care it is incredibly important to distinguish between the median and the edge. We have run into this trap many times. Forecasts that capitation would take over health care were rife in the early 1990s, even though less than 10 percent of doctors were in the group practices capable of absorbing capitation and the rest showed remarkably little interest in it. The problem wasn’t just with the forecast but with the strategic behavior of decision makers such as hospital CEOs: they behaved as if capitation were the mainstream by buying doctors, vertically integrating, and all that good stuff. Similarly, we have prematurely extrapolated Medicare+Choice enrollment, physician practice management, and the electronic medical record (a permanently emerging technology).

Sometimes the edge becomes the median. For example, managed care in various forms virtually eliminated unfettered fee for service. Internet to the home has become the median, and the average American uses it as a source of health information, although not for e-health services and transactions, which remain an edge phenomenon.

So what do you do? First, be honest and clear in your language and in your thinking about the future. Try to distinguish between the median and the edge. Futurists and forecasters use terms such as early adopters, wildcards, and harbingers to talk about edge phenomena, and terms like key driving forces, megatrends, and structural shifts to describe changes in the median.

Second, develop good metrics of the emerging reality. I am a big believer that if something is going to be a big deal in the future, it’s got to start sometime. That’s why surveys are so useful in measuring the real progress toward a new future, a new median. I have had a partnership with pollsters Harris Interactive for more than 15 years because most forecasting is based on a good understanding of the present.

Third, learn to look for what Malcolm Gladwell calls tipping points – the points at which phenomena start to grow or decline exponentially. (Others have termed this discontinuous change or inflection points.) Surveys will help you measure the diffusion curve of new trends. Once you have a few data points, you can do the math.

But you have to have a nose for the emerging trends to even ask the right question in surveys. That’s why the final tip is to keep a good ear to the ground. Conferences, networking with experts and peers, and reading this journal can alert you to candidates for the edge and give you a better sense of the mainstream.

Ian Morrison is an author, consultant and futurist based in Menlo Park, California. This column was published in the June/July 2002 Health Forum Journal.