The Case for Optimism

Don't worry so much!

Depressed? 

Don't be.  While the Disease Management Care Blog prays for the victims and families of the Aurora shooting and hopes that Penn State's travails leads to greater protection of innocents, the DMCB is also an optimist. Humans are remarkably resilient. We rise above evil, We learn from mistakes. And then we carry on.

It'd also be tempting to let the last 72 hours cast a pall over the other Big Problems that beset us, including our sputtering economy, persistent unemployment and politicians who seem unequal to the task at hand. But if you're looking for a better spin on things, a recent The Economist editorial on the Comback Kid paints a different picture. American debt is being pared, family homes are now beginning to look like bargains, the banks are shedding bad loans, a weaker dollar and a nimble private sector (including the "app" factories of Silicon Valley) are driving U.S. exports up and natural gas is making energy cheap and plentiful. Oil imports are down and the U.S. is becoming a net exporter of hydrocarbons. 

What's more, says the DMCB, the U.S. population birth rates and immigration levels are pointing to a 'sustainable demographic dividend,' while our universities remain the envy of the world.  Assuming our politicians figure out a way to cut spending, increase revenue and keep inflation at bay without doing more harm, the longer term fundamentals are decidedly a cause for optimism.  That's a big "if," but it could happen.

But if you think a another reason for economic optimism is the simple expansion of the health care industry, Drs. Baicker and Chandra, writing in the New England Journal about The Health Care Jobs Fallacy suggest you think again.  While politicians may like the prospect of the medical-industrial complex hiring lots of voters who pay lots of taxes, every dollar spent on patients is one less dollar spent by society on education, infrastructure, food, shelter, retirement savings and other government services. In addition, those dollars are not necessarily associated with meaningful gains in life quality or expectancy.  And while it could argued that "reforms" will ultimately reduce costs, it's possible that improved productivity combined with more persons with insurance will ultimately drive demand up.

Which raises a good point.

The economy may turn the corner sooner than we expect, and its long term prospects - despite our political class - are good.  In that setting, health care companies that run counter to the usual historical business cost-plus model by driving higher quality and lower costs will succeed.  Those will be the enterprises that attract customers that can increasingly afford their services. It'll be interesting to see how ACOs, population health companies, the PCMH and wellness offerings fare.

Stay tuned!

Image from Wikipedia