“Market vs. Medicine” – A Roadmap For A Better Healthcare Future

Published on April 21, 2016

As French counter-revolutionary Joseph de Maistre famously said, every nation gets the government that it deserves. The corollary to this statement is that institutional power structures – governments, legal systems, economic institutions – must reflect the norms and values of the populations they serve if they are to be sustainable. The proverbial dustbin of history – war, revolution, bankruptcy – awaits institutions that are out of step with their constituents and refuse to adapt.The cover of Market vs. Medicine

Do Americans have the healthcare system that we deserve? The US healthcare industry is cripplingly expensive (18% of GDP and climbing), fragmented, and wasteful. It is rife with conflicts of interest and misaligned economic incentives. It delivers mediocre outcomes at prices that often bear no relationship to underlying value. These structural flaws are causing an increasing drag on the US economy, threatening America’s longstanding position as the world’s productivity and growth machine. Our healthcare system is most definitely not what we deserve. It is ripping us off. It badly needs a revolution.

In a superb new book, Market vs. Medicine: America’s Epic Fight For Better, Affordable Healthcare, David W. Johnson describes how we got into this mess – and how the American Way of consumerism and innovation will lead us out. Johnson, a veteran investment banker turned consultant and author, draws upon his wide-ranging understanding of history, cultural values, and economics to argue convincingly that a consumer-driven healthcare revolution is already underway. His perspectives on the historical and cultural underpinnings of our current predicament are especially informative. Johnson lays out a detailed and compelling vision for how today’s acute care-focused, asset-heavy healthcare system, which is optimized for revenue generation in a fee-for-service, reimbursement-based payment world, will give way to a consumer-centric future. Value will be prized over activity, consumers will be informed and delighted by their care, costs will normalize, and outcomes will improve.

The book is filled with interesting personal anecdotes from Johnson’s investment banking career – ironically, he was an active financial participant in constructing the system that he now says must change. To help make his predictions concrete and understandable, Johnson profiles numerous disruptive, innovative healthcare startup companies and shares several case studies of incumbent health systems that have successfully transformed their operations to better serve consumers. These examples render the book quite useful to readers who want to apply Johnson’s advice to drive change within their own healthcare organizations.

Johnson is unafraid to speak to the sensitive, third-rail cultural issues that lie just below the surface of any conversation about healthcare outcomes and cost. His writing on these topics is informed and analytical, yet also empathetic. American healthcare spending is dramatically skewed towards treating chronic disease, rather than preventing it – we have a world-leading acute-care delivery infrastructure coupled with a woefully inadequate preventative infrastructure. How can we address the underlying social and behavioral determinants of raging public health crises, such as obesity, diabetes, and stress? Johnson wisely points out that the way forward is to embrace, not fight, consumerism and market economics – this is a key lesson from the consumer backlash against HMOs in the 1990s. Today’s healthcare system spends enormous sums on end-of-life care, often without the full understanding of the human being whose life is actually ending. Is there a better way? Johnson can’t answer these difficult questions by himself, but he is right to raise them.

Market vs. Medicine is, at its core, an optimistic book, but not a naïve or utopian one. Like Toyota in the 1980s and Amazon in the 2000s, forward-looking organizations will reinvent and ultimately dominate a broken industry. Johnson correctly acknowledges that the magnitude of the work to be done is enormous, and that progress will be uneven. New technologies will help enable transformation, but entrenched organizational cultures, payment systems, and governance structures must also change. But ultimately, we will get there because we must. To paraphrase the economist Herbert Stein, something that can’t go on forever … won’t.

With this important book, Johnson has advanced our national conversation about healthcare reform. He has provided everyone who has a stake in our healthcare system – that is to say, all of us – a roadmap for the future that we really do deserve.

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