Three Words That Could Save Healthcare and Entrepreneurship

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In my 4C’s of Innovation program, culture can make or break new ideas. Why? Innovation is change. Change is scary and uncomfortable. It means losing your favorite Snuggie, moving to a new city, or trying a pungent new cuisine served where carpets hang on walls. On walls. In business, it means daring to compete with your own successful product before others do.

Our need for comfort means I spend a lot of time thinking about language. Try explaining an alien concept with alien words and good luck closing a deal with executives who have mortgage and tuition payments. The secret is wrapping the unfamiliar in the sweet, warm embrace of PowerPoint, business cases and acronyms. It’s a step that can’t be skipped.The insane healthcare debate that shut down the government isn’t only a failure of imagination, but it’s a failure of language. There are three simple words that could fix America’s healthcare problem – and they come with a business case even die-hard Koch-heads can love.

The Scare of ‘Obamacare’

That’s not even the name. It’s called “The Affordable Care Act”. You wouldn’t know it. Republicans brilliantly re-branded it “Obamacare”. So anyone already sold on an evil boogeyman named Obama, isn’t going to care for anything with his name on it. It’s why there’s no Charlie Sheen yoga or daycare centers. This video shows what I mean:

Republicans have done this many times before. “The Patriot Act” passed overwhelmingly, despite its massive invasion of privacy. With a name like that, only a traitor would dare oppose it. The same for “Citizens United”, which allowed corporations to buy politicians by the bucketful.

So if voters from both parties overwhelmingly support the individual policies in Obamacare but not Obamacare, how did this bipartisan dream go so horribly wrong?

2b32704[1]Democrats failed by trying to bake every idea into a single dish. Every compromise made Obamacare more exotic and complex. By the time it left the oven, no one had ever eaten ice cream, pizza, and tacos at the same time. A mash-up full of unintended consequences. Then there’s that awful name,The Affordable Care Act. It might as well have been Creamy White Finishing Sauce.

The 3 Word Solution

There’s already a program that largely works, administers health claims, and neither Republican nor Democrat voters want to lose. It’s called Medicare.

Medicare is not without its challenges. But most can be fixed. Its biggest problem is aging. As I type this, thousands of baby boomers are getting into shiny new Rascal scooters to storm the beaches of Miami. Or, moving to Arizona to complain about the dry heat.

So instead of selling the simple idea of “Medicare for all”, we’re stuck building some strange IKEA Frukenstein with a 2000+ page manual and a million extra screws.

Not only would Medicare for all be good policy, it would piggyback on an existing brand and service that everyone seems to want. And it’s shockingly similar to a conservativelibertarian proposal that even Ayn Rand could love. Okay, she probably couldn’tlove…but you get my point.

A population of healthy young payers would almost instantly resolve the adverse selection of Medicare, which takes on the oldest, most illness-prone citizens.

This idea has loads of benefits for both parties. It’s so business-friendly, Ted Cruz and John Boehner could roll around in it for days – it will boost the economy and entrepreneurship. I’ll explain.

The Business Case Even Republicans Can Love

Democrats only spoke lovingly of “single payer” at dinner parties, like you would about rainbows or kitty kats. But few were prepared to really fight for it or make the case to voters. This is a way for them to do it without reinventing the wheel.

The more interesting part is what I wrote in my book Econovation:

If there were ever a case to be made for a single-payer system, it would be based on economic value lost from everyone who remains an employee instead of starting a business. If you’re married with kids and want to start a company, you have enough to worry about without the possibility of being bankrupted by a sudden illness. With the insanely partisan debate on health care, it’s lobbyists, not sound economics, that win.

I have strong libertarian tendencies, which is why I want to liberate entrepreneurs and businesses from ever worrying about – or managing health care benefits ever again. It’s not core to their business and those resources are better deployed doing what they do best, making us want their products. There is no excuse for having thousands of companies and millions of individuals administering something that can be done better by one. As per The Atlantic’s chart below, plenty of countries get infinitely better health results paying way less.

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I often think about problems in terms of economics. In this case, it’s virtually impossible to contain costs with four levels of profit-driven service providers. Doctors, hospitals, insurance companies, clinics, drug and equipment companies are all trying to grow their business each year and our skyrocketing costs reflect each of those layers. Even if each grew at just a 1.5% inflation rate, that still adds up to a 6-7.5% annual cost increase at a time real wages are declining. This math will never work, even with The Affordable [Obama]Care Act.

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Healthcare is a basic building block for commerce. If you’re not healthy, you can’t contribute to the economy. If you fear losing coverage, you don’t start a business. We need more risk takers who are gambling on great business ideas, not on their family’s health.

Getting it Done

My (likely naïve) hope is that both sides can agree on this construct for whatever reasons work for them. Then it’s a matter of developing a plan and negotiating levels of coverage, starting with something basic.

“Medicare for all” won’t solve every problem. There are plenty of things to improve over time, like:

  • Better audits and fraud detection technology
  • Moving from pay-for-procedure to pay-for-outcomes
  • Better use of bargaining power with providers
  • Innovation incentives that drive cost reduction and health improvement. (There are countless public-private partnerships that do this well abroad and here. The wildly successful Tesla electric car is one of them.)
  • A ratings and reward system to ensure high service levels and incentivize top providers.

The good news is there’s nothing about Medicare for all to stop employers, insurers, or even Santa Claus from offering private, premium coverage.

Not only can the market and government coexist, they can unleash a pent-up generation of entrepreneurs who might be too old for startups but too young to die in someone else’s cubicle. And it all starts with language.

I’d love to know your thoughts (no matter how vitriolic some will be) in the comments below. And remember to sign up at IdeaFaktory to get my future articles & reports on innovation and entrepreneurship.

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Provocative predictions & prescriptions on where innovation, economics & culture will take us. Fearless. Funny.