We have all heard the old adage that “two wrongs don’t make a right”. But sometimes, two rights do make a wrong.
We all know that advancements in the medical science space in the 20th century have resulted in a significant jump in life expectancy. This is surely great news for humanity. And, with population control and family planning awareness campaigns, we are seeing a reduction in the size of families. For a number of reasons, that is good news too.
However, in the developed world, their combination has led to a peculiar problem – a growing population of aged people, and hence rising healthcare costs to take care of them.
Writing from Asia, where the population is still young, I cannot help but think that it is only a matter of time before the same issues plague other developing nations. And the more I think about it, the more I am convinced that we all need to move towards managed care, rather than incident-based curative treatments. At the risk of making it too simplistic, what that means is that a sure-shot way to reduce healthcare costs is to fall sick less or be healthier to begin with.
Let me take an analogy that we all can relate to. If we take care of our car and get it serviced regularly, it rarely breaks down. And so, by spending smaller amounts to proactively take care of the car, we save on the bigger costs of repairing major issues.
The same principle applies to our bodies. Managed care encompasses all that we do to take care of our body holistically – preventive healthcare, regular diagnostics, proper diet, to name a few. As a result, there is less chance of developing a major illness (or at least, we’ll be able to detect it sooner when it is easier and cheaper to fight it). Not only would we save on treatment cost, but we also save on the time lost for the patient and the family. Extending the car analogy, this is akin to the loss of time and productivity incurred while your car is being repaired at the garage.
However, this is just one way managed care reduces costs. There are various aspects – such as incentivizing doctors to use cheaper drugs, regulating length of stay in a hospital, tie-ups with pre-selected and limited set of providers, and more fundamentally, incentivizing good health – that together help to reduce costs and improve the “management” of health.
This is not to say that managed care systems are without flaw. There are mixed views on their efficacy and many concerns are raised. Clearly, a lot of work needs to be done before we reach a sustainable solution.
In a series of blog posts curated by the World Economic Forum’s Health Team, a number of leading voices present their perspectives on health and healthcare in the run-up to World Health Day on 7 April.
Author: Shivinder Singh is Executive Vice-Chairman of Fortis Healthcare Limited and a World Economic Forum 2013 Young Global Leader.
Image: A jogger runs past a puddle in Central Park, NY REUTERS/Natalie Behring