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Why does the U.S. spend so much in healthcare? (Part 2)

By: | Tags: , , , , , , | Comments: 0 | June 28th, 2018

In our last blog, we brought up the recent article in The Atlantic magazine, noting the title had gotten my attention: “How We Spend $3,400,000,000,000 – Why more than half of America’s healthcare spending goes to five percent of patients.”  As we stated, younger people generally don’t spend very much money on healthcare with relatively modest costs until about age 45 when the cost begins to escalate yearly.

I have had the honor and pleasure to speak to numerous young people – innovators in healthcare – that are seeking to enter healthcare technology.  I uniformly support their interest in healthcare and agree that the healthcare technology/digital health revolution is just beginning.  I advise them, that whatever gadget, software or application they create, should be designed for an 80-year-old Hispanic female.  Before you get offended by that statement and assume the wrong thing, let me say that effectively describes my mother.

My mother may have come late to the electronic age, however today she has a Fitbit, a Samsung Galaxy S7, a laptop and two iPads – all using high speed internet.  She has an email address, a Facebook page, and uses WhatsApp on her phone.  So, she is not unfamiliar with technology.

My mother also checks her Fitbit data using her iPad.  So, I will tell those that are wishing to revolutionize healthcare with new technology the same thing – think 80-year-old Hispanic female.  As you will recall, we also noted that “65-84-year-olds spend about $18,000 per year on healthcare (of that about $5,000 is out of pocket).”

Recently, technology and health reporter Christina Farr [@chrissyfarr] wrote an insightful article for CNBC.com, titled “Why Apple should hire your grandmother.”  The keynote point was “companies have been much more focused on designing their products for millennials.”  This reiterates the issue we have previously noted, millennials as a generation are barely registering in cost of healthcare; likely impacting healthcare only about 25% as much as 80-year-olds.

Ms. Farr made these relevant points:

  • U.S. population is getting older, richer and sicker
  • Technology giants Amazon, Alphabet and Apple have created devices perfectly suited to help aging Americans, with voice-powered assistants that get smarter as they learn more about their users
  • Companies haven’t invested ample resources to tailor their apps and services to an older demographic

Ms. Farr continues:

One way to speed that up would be for the tech industry to hire people who understand the needs of this population.  In other words, they should hire older Americans.  “This is a total blind spot for technology companies,” said Katy Fike, co-founder of Aging 2.0, a group that supports entrepreneurs in the aging space.  Fike said these companies should particularly consider hiring and interviewing more older women.  “Women tend to live longer and continue to make buying decisions for their families and aging parents,” she said.

This article confirms our observations – elderly Americans have gotten familiar with using technology, yet we are still missing an opportunity to improve healthcare with technology.  To change that, we must concentrate not on millennials, but on the generations where both healthcare spending is greater and where active engagement can have the best impact.  We advocate for a Universal Personal Wellness Record (UPWR), more use of telemedicine, IoT connected and interpreted devices, complete price transparency, and most importantly rewarding patients to get healthier.  More on all that in our next blog.

 

https://www.cnbc.com/2018/06/22/why-apple-should-hire-your-grandmother.html

https://www.theatlantic.com/health/archive/2017/06/how-we-spend-3400000000000/530355/

http://www.healthcostinstitute.org/files/Age-Curve-Study_0.pdf

https://www.cdc.gov/nchs/data/hus/hus16.pdf#093

www.pwc.com/us/medicalcosttrends

https://www.justfacts.com/healthcare.asp#spending

http://www.healthcostinstitute.org/

https://www.washingtonexaminer.com/gop-will-try-again-to-repeal-obamacare-death-panels

https://www.bls.gov/opub/ted/2016/annual-expenditures-by-age-group-2013.htm

https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

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