Does the Consumer Now Have to Take Responsibility for Their Own Healthcare?

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For the reason why I think the consumer era is really going to happen this time is you have to get a bit of the back story and the back story is that since the end of the World War II, we've had a health insurance system that's been employer-based. It's been a tax-free benefit for over 60 years for consumers and that covers about 95 million workers in the United States.

Well, now we have a parallel universe called the Affordable Care Act, which is an entitlement with mandates and you've got these two different health care insurance systems that have to coexist and there're going to be some derogatory effects. One of the derogatory effects is that is escalating the cost of healthcare adding[sp?] 30 million more people to the system and the employers are saying, "Hey I just can't afford to give away this free benefit anymore, so what are they doing?" They are becoming self-insured employers and the payers I've talked to believe that certainly by 2020, there well over half of the employers will be have moved to a self-insured employer model.

In a self-insured employer model, the employers can do things that politicians won't touch. The politicians are afraid of the third rail, they will not penalise you if you're obese, they will not penalize you if you smoke, they will not penalize you if you abuse alcohol but the employer can and they can do it through penalties and they can do it through incentives because they're writing the plans.

They also have a healthier population than the general population because these are people who're actually working, so their cost is going to be lower. But the other thing they are doing is they're starting to limit the range of benefits of their cover and they are increasing the deductibles.

So they're moving to high deductible plans and it's more, more typical that those employees and their families will have the first 5000 dollars every year, out of pocket. So, we're all brought up to be conditioned on co-pay, where somehow the system always pays for it, and it can't happen anymore.

And as you start to have this high deductible world and you have people having to say, Gosh, I better look around to see what things cost, and is there a better way, and we already have good examples that that's happening with the walk-in urgent[sp?] care clinics. There're now 9, 000 of them, didn't exist a decade ago, and people can go in and see a doctor without an appointment, typically takes 20 days to get an appointment if you go it through a regular system.

The cost of these appointments are a fraction of what a appointment doctor visit is, and I believe that we're going to see a range of new kinds of consumer branded health services. I'm working on Telehealth with NDY. That's just one example where you can have virtual doctor visits particularly for lower curity care.

CMS Center which is Medicare Medicaid says that over 50 percent of face-to-face doctor visits could probably be handled virtually with a virtual visit. So these things which seem a little odd right now, they're going to become very, very common place I believe over the next five years, and that's why I'm very enthusiastic that we really can make a dent in the way the healthcare is delivered, we really can bring innovation in, technology can play an increasingly important role.

It's not personal computers, it's not the internet, it's about big data analytics, it's about the uses of censors that can monitor all kinds of things, it's about inner[sp?] ability of electronic health records. It's about, you know a whole new range of disruptive ways in which health care can be delivered.