May 2017
Wed, 17 May 2017

Why Your Healthcare is So Hard: 10 Good Reason$

Article by Duff Watkins
  • 0

- Why politicians care about your health − really!

- Why somebody, somewhere, always has to pay

- You want many things when you’re healthy, but when you’re not….

“Nobody knew health care could be so complicated” proclaimed President Trump. (Except Obama and any person who ever bought health insurance.) “It’s unbelievably complex,” Trump added.

Whether in the USA or Australia, healthcare is hard!health 2

But why is healthcare (i.e. the organised provision of medical care to individuals) so complex? What makes healthcare so hard?

To find out I interviewed, Andrew Wiltshire, SeniorDirector of Corporate Affairs for Medtronic (ANZ).  He’s a healthcare lobbyist in a global role. He deals with politicians and government all the time. (listen to him here on the AmCham podcast: Why Healthcare is so Hard)

He gave me 10 Good Reasons why healthcare is hard.

1. Hands up if you want health? Healthcare is a universal need. Whether you’re young or old, rich or poor, male or female; white, black or yellow, health is important to – literally—everybody. Your healthcare is important to a government because it’s they who provide the healthcare that you need.

2. You ain’t cheap. Healthcare isn’t cheap and taking care of you costs plenty.  Healthcare is ahealth 1 major expense in any government’s budget. (OECD average is +10% of GDP.)  Delivering better services inexpensively is the aim of the healthcare game, but there are lots of players in the game with competing interests and priorities (e.g., patients, consumers, health professionals, hospitals – private and public – insurers, government, and companies). That’s what makes it so political.

Squeezing the most health out of every dollar spent is a challenge for government.  To whom do you listen when there are so many voices in your ear telling you how to spend the money?  Every hard decision means somebody will be unhappy. (Let’s not envy any Health Minister anywhere in the world!)

3. OMG! It’s emotional! Healthcare is emotional. On any day, in any news outlet, you can find a health story. It’s either about how someone’s life was improved by healthcare, or how somebody suffered from shoddy healthcare. It’s easy to create a health story – positive or negative – because you, the reader, can always relate.

4. Money complicates it. health 3

Innovation comes from profit seeking companies and there is constant pressure on them to innovate. But innovation takes time, effort and money, so it becomes just another cost.

(Did you know that MRI machines cost between $150k up to $3M? Which do you prefer?)

Healthcare is a service and a business. Everyone involved in health gets paid, whether private or public. Private companies need to earn profits (or the business fails); the public sector needs to stick to a limited budget (or they fail). As usual, money complicates everything.

5. Love your local lobbyist.  Negotiating with government is a long-term process. Politicians genuinely want the best outcome for society and depend on informed healthcare lobbyists to provide the accurate information and up-to-date research by which to make sound decisions.  Politicians are generalists; lobbyists are specialists; they depend on each other.

You’re a winner, says Andrew, if you can say to the government I have something that will improve the health of consumers and cost you less money.” That’s the Holy Grail of healthcare.

6. Politicians cooperate (…shhhhh!). On TV you see politicians throwing verbal barbs and bombs at each other but they probably dine together in the cafeteria. About 80% of legislation passes in a bipartisan way. There are many bipartisan committees, including health, on which politicians work together, find solutions, and progress matters. Weirdly, they don’t always want you to know how often they work together! (Are they afraid it’ll improve their image?)

7. A policy ≠ a practice. Healthcare is defined as the systems and policies already in place. It’s difficult to predict how new policies will work in the real world. Sometimes it’s better than expected, sometimes worse. Either way, politicians must achieve results through existing systems and practices, and regulations change slower than technology.

8. New Technology is the solution and the problem. We innovate faster than we adapt. Technology changes fast but a healthcare system is fixed.  It’s difficult to stay technologically current and it’s impossible to update systems, policies and practices quickly. Once an innovation is introduced, it has to be monitored and evaluated.

health 4

For example, let’s examine the evaluation process:

  • - A new technology arises when an engineer, doctor or somebody develops a great idea,
  • - Then you build it, prototype it, test it, put it through clinical trials, do what’s necessary to ensure that it works,
  • - Then figure out how to manufacture it,
  • - Then introduce it into the market (or country); if it’s a medical device it’ll be evaluated by the regulator, which alone takes 9 months to 2 years.
  • - Then, if it’s to be paid for by the existing health system, it gets evaluated further by professional committees. Add another 2 years. Already the ‘new’ innovation is 3-5 years old and it hasn’t reached you yet.
  • - Then, because somebody has to pay, government must determine where it’ll be delivered within the healthcare system. Who actually uses this innovation: the doctor, hospital, patient, government? Nothing comes free; somebody’s got to pay along the way. Once again, money matters.

9. Too few patients. If there aren’t enough patients in a market health 5(or country) to benefit from a medical innovation, or there’s too great a lag in generations of technology, companies won’t introduce an innovation because they can’t justify the investment. A healthcare system not only needs solutions, it also needs enough patients to warrant having that solution. As with any business, healthcare needs consumers (i.e. customers). Otherwise, it’s like Apple developing a new iPhone but only for New Zealand. Companies need wide applications of their products to pay for the development of those products.

(Speaking of New Zealand, they piggyback!  NZ has no system for pre-market evaluation of medical technologies. They simply accept other countries regulatory processes. So, when a new technology is ready to sell in another country, NZ ‘piggybacks’ of that regulatory system and accepts the new technology as ready to sell in NZ. Thus New Zealand has instant access to the newest technology. Smart Kiwis!)

10. Preventative Maintenance is best (and cheapest). You (and your government) are wise to invest as much as possible in the front end – where it’s cheapest – rather than the back end where it’s most expensive. The more you invest in getting or staying healthy now (e.g. gym membership, sound diet, regular check-ups at the dentist and doctor, etc.) the less it costs you (and your government) overall. The deeper you go into the healthcare system, the more expensive it becomes. Awaking in an intensive care unit is about as expensive as it gets.

Did you know that about 80% of healthcare expenditure occurs in the last part of you life, especially if you have a chronic disease. Health insurers say 80% of their costs come from a tiny percentage of patients with chronic disease. So it’s far better for you (and your government) to keep you out of the expensive part of the healthcare system.

Bottom Line: When you’re healthy, you desire many things. When you’re unhealthy, you desire only one thing: your health.

So if you think your healthcare is expensive, ponder the cost of your health repair.


Dr. Duff Watkins, a former psychotherapist, hosts the AmCham Business Podcast and is Director of ExecSearch International- Australia. 

For more information on how you can contribute to the AmCham blog, check out our ‘AmCham Blog Guidelines‘ or contact our office today.

Leave a Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>