I heard Perry marshal, an engineer turned marketing consultant turned someone trying to cure cancer, say that he’s looked at it every way and there is no money in prevention. Prevention might be what people need but they don’t pay for prevention they pay for treatment.
His marketing experience taught him going into the prevention game is a losing strategy.
A $500 dollar cancer screening to a healthy person is a lot harder sell than $750,000 in cancer treatment to someone with cancer.
So due to human economics, the prevention industry is a tiny fraction of the size of the treatment industry, and not just for human health either. Humans are cheap when it comes to prevention.
So the medical industry, by going with the flow as fellow humans, is structured for treatment. It’s what the people want after all and there is a solid business around treatment anyways so you may as well get that money.
The industry thinks treatment, teaches treatment, sells treatment, deals with people who are in need of treatment, researches treatment and writes textbooks for treatment and so on. To suggest that something could have been done to prevent the need for treatment is weird because “that’s not what we do.”
And anyone who has ever worked in a business understands what “that’s not what we do” means.
Wal-Mart sells hammers but if you need a pallet of concrete you need to find the Home Depot.
Prevention isn’t what the medical industry does. And that’s okay because that’s what you would expect from human behavior.
Simply put, the medical industry has no incentive to keep you healthy. It’s not that your doctor consciously wants you sick he just isn’t in the healthy people business and neither is his boss or his boss’s boss or his teachers or his teachers boss.
But it gets worse.
There is another professional entity involved in your healthcare and that is a health insurance company or a government agency that acts like a health insurer. The problem here for you is that health insurers get paid on the spread of what you pay and what they pay. It’s not a classic case of insurance.
Your auto insurer wants you to drive safe. They don’t want a payout for a wreck. Your health insurance is a pass through and negotiate mechanism. The health insurer is required by law to payout 80-85% of your premiums so they want that number to go up and their discount to go up. What they don’t want is the overall cost of health care to go down.
And they have to spend the money anyways so there is no incentive to keep you healthy. The only time incentives come into play is denying coverage once the health insurer pays out 85%.
So the insurer doesn’t care if you are healthy and they don’t like paying when you get really sick, they will fight tooth and nail to deny coverage once you get over the threshold.
Wall Street didn’t pay Brain Thompson a $100,000,000 a year because he ignored these incentives.
It’s a great gig if you can keep it.
It’s a horrible incentive structure though.
So let’s ask the question of who is incentivized to keep you alive? And has deep pockets, talent, and actuaries?
Your life insurer.
Your life insurer doesn’t want you to die because then they will have to pay out the death benefit and that will cost them a lot of money.
Your life insurer would put money into new ways of keeping you alive. With the data and expertise they have and would begin to accumulate more of, we would have a totally different kind of medical niche in the industry.
Currently this is illegal though. There is a separation enforced between the life insurance industry and the health insurance industry.
That separation needs to be abolished.
Health insurance, rather than a tradition, is a set of accumulated accidents. These accidents started as a result of the Communist administration of the USA in the 1940’s that froze wages and came down heavy of life insurance companies for having lavish parties for their executives.
Before America was Communist, the Metropolitan Life Insurance Company extended thousands of their clients lives by sending nurses out to the tenements to keep their clients alive with simple treatments. No regulators or bleeding hearts needed. Met Life claims that they doubled their money on sending nurses to their clients.1 They covered the program in their book “A Family of Thirty Million.”
Sending a nurse is cheaper than paying a death claim so Metropolitan Life sent the nurses and became a titan of 20th Century American Business.
It worked then and it can work today.
1 A Family of Thirty Million https://babel.hathitrust.org/cgi/pt?id=uc1.$b88674&seq=207&format=plaintext