The Big Short and healthcare
“The healthcare industry is very much like the financial industry before the crash,” said Michael Lewis, author of The Big Short, addressing the American Hospital Association (AHA) in July 2015.
“It is opaque, complex and run by experts serving a group of consumers who don’t understand how the industry really works.”
I recently finished listening to The Big Short and shortly after had the pleasure of seeing the movie. If you have not read it, I strongly urge you to consider reading the book and then seeing the movie. They make a nice pair.
You might never expect such a great story about a financial meltdown, but the characters, the story and its application to our healthcare marketplace are compelling. Much like the author’s comment above.
If you choose not to read or listen to the book or see the movie, here is the book in a sentence: Several unrelated and eclectic groups of financial outsiders thought the housing market was going to go bust and made billions betting against conventional Wall Street “wisdom” in 2007.
The big short, healthcare style
What is the conventional wisdom of the day in healthcare?
Here is how I would paraphrase conventional thinking today about healthcare: Americans may be getting less healthy, but we must be making great progress because our local hospital seems to be adding another parking garage.
At the AHA meeting, the moderator asked Lewis, “How do you apply Moneyball to healthcare?”
Moneyball is another excellent book from Lewis. It details how the manager of Oakland Athletics Major League Baseball team built a successful franchise out of undervalued professional baseball players and executives.
Lewis answered bluntly, “Prevention is the whale in the room, but incentives are arranged badly.”
Wow! In the audience, I could not write this stuff down fast enough. Then, while I looked around expecting all these C-Level Hospital executives to be calling for Lewis’ head, there was a subtle nodding and murmur of agreement.
Lewis was keen to mention that he really had no idea how the healthcare marketplace worked, yet had no problem telling these execs that their king had no clothes. Even more unbelievable, the executives seemed to agree.
Here is my take: Healthcare profits are going up while the number of Americans that are overweight, sick and medicated is going up at a similar rate. We cannot fix healthcare until we heed Lewis’ comments and address the whale in the room, prevention.
By focusing on what we can do better, as both patients and health professionals, we can always improve. For patients, that means taking advantage of information on healthier lifestyles. For us in the industry, it means making information more accessible and easier to use.
From automated enrollment processing to mobile apps, we should be using cutting-edge healthcare software to optimize every process and improve patient care – even before we see them.
After all, we don’t want to short our most precious resource – our health.