How does a COVID-19 United States Healthcare System Rebuild?
A Bloomberg headline recently read: “1.5 Million Unemployed Health-Care Workers Signal a Failed System.” Like me, some are stunned; in 50 years, during several recessions, healthcare employment has not budged from its upward trajectory. Through the last major U.S. recession in 2008-2009, the healthcare employment growth-rate remained unfazed. The reality, as we have noted many times, is that the next 10 years will likely be the most stressful in modern history for the United States’ economy and healthcare (and in other ways for most developed countries) as the balance of a generation of Baby Boomers retire and enter the U.S. Medicare System; this historical generation is putting pressure at every touchpoint.
Clearly, as it is both obvious and painful, the U.S. healthcare is broken by any standard or efficiency metric and the traditional ‘fee for service’ model cannot survive. The United States has just spent approximately $100 billion in government mandated electronic medical records, and we have not improved the quality of patient care or reduced healthcare costs. Instead, we have seen an increase in physician burnout and consumers are still not able to control their own medical records, which should be their right.
We are confident that healthcare has had the equivalent of a near extinction event. Clearly, it cannot go away, but it has experienced a historical meltdown as no one had or could have even predicted. We all now know that “pandemics,” like COVID-19, have been discussed in academic circles and government for decades, in TED Talks® for many years, and even Hollywood has made a few movies with “Contagion” (2011) being the movie many have seen over and over. So, let’s agree that this pandemic was in fact predicted. Some have referred to it as a “Gray Rhino” event as coined by Michele Wucker in her book by the same name. The description notes:
A “gray rhino” is a highly probable, high impact yet neglected threat: kin to both the elephant in the room and the improbable and unforeseeable black swan. Gray rhinos are not random surprises, but occur after a series of warnings and visible evidence. The bursting of the housing bubble in 2008, the devastating aftermath of Hurricane Katrina and other natural disasters, the new digital technologies that upended the media world, the fall of the Soviet Union…all were evident well in advance.
Yes, we are living though an event that was clearly predictable. What was NOT predictable though was the entire healthcare system would be closed except for emergencies (which were dramatically reduced and a topic for a future blog) and treatments of COVID-19 symptoms and patients with similar symptoms. As of today (Tuesday, May 26, 2020), the United States reports about 1.6 million confirmed cases and approaching 100,000 unfortunate victims in a population of approximately 330 million people.
The world and the United States have witnessed what most would agree was a Gray Rhino; however, healthcare in the United States has experienced another type of incident and that is a Black Swan. That term was made famous by Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street trader. In his book, that I found fascinating, he describes a rare, even unpredictable event; others describe it briefly as:
“A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight.
A black swan is an extremely rare event with severe consequences. It cannot be predicted beforehand, though many claim it should be predictable after the fact.
Black swan events can cause catastrophic damage to an economy, and because they cannot be predicted, can only be prepared for by building robust systems.
Reliance on standard forecasting tools can both fail to predict and potentially increase vulnerability to black swans by propagating risk and offering false security.”
From our viewpoint, there is no doubt that a Gray Rhino event has led to a catastrophic economic crisis and until this year, an unpredicted event (the Black Swan) for healthcare in the United States. We believe this catastrophe is the beginning of a “Renaissance” and will accelerate the transformation of healthcare from what would have been a 10-year process compressing it rather into ten quarters.
FASTEN YOUR SEATBELTS AND HOLD ON!
-Noel J. Guillama, President
Wucker, Michelle, “The Gray Rhino: How To Recognize And Act On The Obvious Dangers We Ignore,” St. Martin’s Press, New York, NY, April 5, 2016.
 Talib, Nassim Nic holas, “Black Swan: The Impact of the Highly Improbable, 2nd Ed.,” Random House Publishing Group, May 11, 2010.