RFI: Health care financing (8)
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Dear Colleagues
The progress in medical science over the past few decades is
amazing. But the economics and the financial dimension of the
health sector is a disaster.
A friend from the Harvard Business School identified the health
sector as the "most in need of business management" back in the
1960s... and globally this remains a valid observation almost 50
years later.
As many of you know I am an old cost accountant... and used to
do interesting work in operations research to try to get the
most result from the least use of resources. It is still a pas-
sionate interest... of a great relevance in the global health
sector.
There is a lot of talk (but almost no action) about transparency
and accountability, but, worse, the foundation for this being of
any value is non-existent. As far as I can see there is almost
no meaningful accessible information about how much things cost
and what are the results, both immediate results and longer term
results.
There is also a lot of talk about everyone having the "right" to
good health care. But where is the rigorous thinking about where
the funds are going to come from to pay for good health care.
Who has the responsibility to pay for good health care... the
patients, the world's wealthy, the caregivers themselves who
don't get paid... who?
The "health" of the economy may well be the key to the "health"
of the people. In a healthy economy, people can afford to pay
for what is important to them, even if the government and the
international official relief and development assistance (ORDA)
sector has no money... or won't use it for practical support for
people's health.
Understanding the various "value chains" in the health sector
may well also help to improve health sector performance in a
practical way. The value chain is less miracle than it is mi-
rage. It has served to move wealth from one segment of society
to another... and there has been little attention paid to it.
But value chain explains why a lot of relief and development ex-
penditure and investment produces little durable value in host
countries. The research component of the international ORDA com-
munity is a value chain that should, it seems, be analyzed very
thoroughly to relate the spending with the practical results...
I recently had a heart procedure in the USA involving two
stints... the price of these stints was, I believe, around US$
3,000 each... that is before the hospital and the medical staff
did anything and added their charges. How much did these stints
actually cost? Research and development: several millions dol-
lars... each incremental stint: perhaps US$ 20... I don't know.
But the companies that produce this medical material seem to
generate huge profits relative to the number of staff employed,
the amount of capital invested, and the amount of profit they
were making just a few years ago... and looked at from a pa-
tient's perspective the health sector is both rich and broke.
I hope it will soon be possible to relate costs and resultant
value to activities in the health sector... and to be able to
look at these data in an independent and objective manner.
Sadly, too much information is being prepared and published that
has an agenda that goes beyond getting the objective facts into
circulation... and it is distorting the assessment and decision
making... and in my view... is helping to constrain success in
getting funding to provide reasonable health care for a lot more
people.
Sincerely,
Peter Burgess
Tr-Ac-Net in New York
Tel.: +1-212-772-6918
mailto:peterbnyc@gmail.com
The Transparency and Accountability Network
http://tr-ac-net.blogspot.com
http://www.tr-ac-net.org