If we were truly open market?

Where can open market help? Clearly we can gain transactional cost savings by allowing global insurance carriers to offer their products. Global prescription filling is another source of savings. How about increasing the physician pool? Although not proven, if we were to accept technology aided telemedicine as an option, we could easily double the number of physicians.

Let us set the baseline (all data points are based on informal research with Google as the dominant research platform). The healthcare expenditures are roughly 3 trillion annually in the U.S. There are about 15 million workers in the healthcare field including about three quarters of a million physicians. Healthcare costs are skewed in terms of a life cycle view, the first 6 months and the last 6 months of life consuming a major portion. Healthcare costs are also skewed with reference to complex cases – about 16% of patients consume over 50% of the costs. The average encounter time between a patient and physician is roughly 12 minutes and more than half of the diagnosis are inaccurate. Accurate diagnosis, specifically identifying the complex cases early, will save us at least 25% of the costs for treating complex cases. The cost of “overseas physicians” are significantly lower (about a third of the cost of physicians in U.S.). If we do the math (average cost of a US physician is about 200,000 dollars per year), the net savings therefore is in the hundreds of billions (about 300 billion based on my back of the envelope calculations). In addition the increased encounter time can reduce erroneous diagnosis further reducing healthcare costs. Sadly, United States is encumbered by a highly polarized and irrational political system. Technology will not be used to make such major strides. I hope I am wrong.