Healthcare is about to go through the Looking Glass and into a strange, disorienting universe of reversed incentives—a universe where assets suddenly transmute into liabilities, where yesterday’s carrots becomes today’s sticks, where things that once seemed laughable or of little importance suddenly become essential.
 
I hope you’re ready for it.
 
To understand what I mean, you need to understand a couple basic things about how healthcare has been financed, and the way in which for-profit insurers modulate the practice of medicine. For one, you need to realize that up until pretty recently, insurance plans actually made more money when healthcare costs went up. If their profits are a percentage of through-put, the more money that churns through their systems, the higher their net returns.
 
That’s one reason why the insurers—despite the economic downturn, despite mass unemployment, despite soaring medical costs—have continued to turn record profits during the last few years. That’s why—despite all the nice PR and lip-service—there’s been little insurance industry support for true preventive healthcare, nutrition and holistic medicine. Yes, the insurers have had incentive to withhold care, ratchet down on payment to practitioners, and find ways to eliminate plan members who suddenly become expensive.
 
But overall, the insurers have had very little incentive to actually rein in costs. Why? Because they could always pass along the cost increases.
 
The entire system is built on two basic assumptions: 1) that having health insurance is essential for having healthcare, and 2) that insurers can simply raise their premiums to employers and individual plan members whenever they want. The former proviso will likely be with us for a long time. The latter—the assumption that costs can be passed along—is what’s about to change. And when it does, so will a whole lot of things about healthcare.
 
A few months back, I had the opportunity to interview a very interesting fellow named Dr. Garrison Bliss. An internist by training, and a pioneer of direct-pay, no-insurance primary care, Dr. Bliss is currently medical director of Qliance. The company provides attentive, no-wait care, free from insurance constraints, for a monthly membership fee ranging from $45-$125 (depending on age and level of health). Turbo-charged with more than $13 million in venture capital, the Seattle, WA-based company is gearing up for national expansion.
 
Dr. Bliss is one of the most astute observers of healthcare systems I’ve encountered in more than 25 years of medical journalism. In his view, the current healthcare situation is similar to the real estate bubble: runaway costs not tethered to fundamentals and fueling big payoffs on Wall Street and in corporate board rooms at the expense of ordinary people.
 
“Like everyone else living in a bubble, the insurers—and everyone who was benefiting from insurance-based medicine—wanted to believe it would go on forever. But it will not go on forever,” said Dr. Bliss. “The bubble is about to pop, and they know it.”
 
Why? Because employers can’t afford further increases. They’re simply saying “No,” and dropping insurance coverage altogether, or paring back to the most basic major medical plans. Premiums are already so high that many ordinary individuals are priced out of the market.
 
And then there’s healthcare reform, which, once implemented, will put another 40-50 million Americans, many of whom haven’t had access to care in decades, into insurance plans. The federal government will restrict the insurers’ ability to freely raise premium rates (a big reason the insurance industry went ballistic on Obama). The plans will no longer be able to get the 15%-20% annual rate increases on which they built their empire.
 
Simply put, there’s nobody left to whom insurers can pass the costs. “The insurers have painted themselves into a corner,” says Dr. Bliss.
 
That, he believes, is a very good thing for people working in preventive medicine. Suddenly, the healthcare systems—from insurers to hospitals to the doctor down the street—will have some serious incentive to prevent expensive chronic diseases. Since we’ve already got epidemics of diabetes, obesity and heart disease, there’s going to be a lot of interest in coming up with less expensive, more effective modes of treatment.
 
Hear that nutraceutical people? A lot of interest in less expensive, more effective preventive modalities!
 
In this new healthcare landscape, things like nutrition, botanical medicine, lifestyle modification, stress management—clinical approaches that were more or less marginalized by mainstream medicine—will become increasingly important.
 
Insurers are going to put a lot of pressure on clinics and practitioners to keep people out of high-cost hospitals and away from expensive therapies. That does carry with it some dangerous implications: insurers will look for any way they can to restrict procedures they deem “unnecessary,” to get rid of people they consider “bad risks,” and to ratchet down on physician payment even further.
 
But at the same time, by necessity, preventive care will move from the margins to the center stage. The health plans, and the practitioners working in them, will suddenly be a lot more open to approaches that actually prevent more expensive episodes of care down the road. The incentives are finally aligning to actually reward—rather than marginalize—doctors who are good at keeping people healthy.
 
That means we’re going to need a lot more practitioners well-versed in lifestyle-based medicine, and able to implement preventive care in practical, real-world settings. The good news is that many physicians actually want to go there!
 
In Holistic Primary Care’s recent Physicians’ Survey, which garnered data from a sampling of 2000 primary care doctors all across the country, 75% of respondents—and nearly 80% of these are conventionally trained, mainstream MDs—indicated a desire for more education in diet and lifestyle-based medicine.
 
Further, 91% of respondents agreed with the statement that, “Dietary changes and nutritional interventions are a fundamental part of the care of patients with chronic diseases,” and 62% agreed with the statement that, “Diseases and conditions can be treated or ameliorated with supplements and natural products.”
 
We now have an unprecedented opportunity to educate clinicians on nutrition, lifestyle interventions, herbal medicine, exercise and other aspects of natural preventive healthcare. These things are no longer luxury topics, they’re going to be a necessity.
 
According to Dr. Bliss, the coming years will be characterized by, “a pole reversal, where those higher prices that used to translate into more revenue for insurers, become higher costs that the hospitals and insurers will have to bear. When that happens, the incentives will change. They know this is coming. So they’re going to have big incentives to save money and cut costs. Good, comprehensive primary care can do that—keep people healthy, save money and cut costs.”
 
As the entire healthcare system goes through the Looking Glass, holistically-minded practitioners and the nutraceutical companies that support them, will have a golden opportunity to step forward and take a rightful place. To be sure, there will be frumious Bandersnatches to avoid, Jabberwocks to slay. We’ll surely run into Jubjub Birds and all sorts of other weirdness along the way. It will take time to adjust to this new world of strange reversals.
 
But for those of us who feel that the old modes of healthcare shut us out, banished us to the hinterlands, or simply humored us with a pat on the head, this new world of reframed incentives might feel like Wonderland after all.