Have you noticed most of you probably haven’t gotten raises in the last 10 years? Well, your boss has told you you’ve gotten a raise, but neglected to mention that you’d be footing an increasing share of your health insurance premiums plus all of the deductible.

In the end, your net earnings have probably decreased. Do the math. For those of you making over $100k in a high growth industry, you might not have noticed, but for those making a solid middle class salary that rises proportionately to inflation, it hurts.

When your employer and the healthcare industry is asking more and more of you, you’re probably wondering what you’re getting in return. It’s surely not better customer service or a wider breadth of things they cover from your health insurance company. And it’s not nicer waiting rooms, friendlier receptionists, same day appointments, easier refills, and longer appointments with your doctor. You’re paying far more and getting far less. I guess one caveat to this is Obamacare mandated coverage for a smattering of different things of questionable value. But then the daily news coverage of the political bickering about Obamacare and Repeal has turned your trust in the government to a bit of a life and death joke.

I’m a bit obsessed with my company, Sherpaa. I want it to be a success. It deserves to be. People need a pleasant, convenient experience with accessible doctors at an affordable price. But what does affordable mean to people? Since I’m obsessed, I ask as many people as I can about Sherpaa. The first question I get 90% of the time is “will my insurance cover this?”

When people’s spend is already maxed out, they’ll go through hell.

Insurance companies only cover the status quo. If having health insurance to most people means your care will be covered, and they discover that this thing they want (name any healthcare innovation looking to make a patient’s life easier) is not covered, does that mean, in their mind, it’s not good care? It’s the terrible Catch-22. Insurance companies stifle innovation. But that’s already been covered. The real reason why people ask this is they’re already maxed out, getting less and less value, and they’re looking for hacks to the system (how can I still get what I need but for free?). When the government mandates your $700 monthly premiums, and you need primary care ~2 times a year, and you can’t envision how or why you’d ever spend your $4,000 deductible (it’s human nature to think you’ll never get sick or hurt), you can’t come up with a good reason to spend any more money on anything remotely related to medical care and doctors. I’m already spending a ton, that should be purchasing me something, right?

People are super confused about premiums, deductibles, co-pays, co-insurance, medical bills, Explanation of Benefits, in-network, out-of-network, formularies, pre-authorizations, lists of doctors, balanced billing, etc, etc, etc..

That’s why very, very smart people who are doing complicated, important things in the world essentially throw up their hands, ignore the nonsense as best they can, and choose to deal with this BS in the heat of the urgency or after they’ve gotten care. It’s so complicated, they cannot formulate a proactive strategy to spend their money wisely or use care appropriately. And insurance companies don’t care as long as we continue paying our premiums. Plus, they’ve got a mandate that requires us to continue paying for this terribly complicated, financially harmful experience. Which brings me to the next point.

Insurance companies don’t care about you

You’re just a number to them, and hopefully you’re part of the large percentage of numbers that doesn’t cost them money. But no matter what they do, they’ve learned over the decades they can’t really do much to prevent you from being a cost to them. They might have to cover your maternity care due to Obama, but maternal mortality in America has risen over the years so is covering preventive care even worth it? And they know that most people won’t take advantage of their free preventive care so they just threw the government a bone.

You don’t care about insurance companies

Nobody ever, anywhere, said “I sure do love my health insurance company…I’m sticking with them forever.” You’re just looking to tick off the box saying you’ve got coverage. Most of you don’t actually know what level of coverage you need, because you can’t predict the future. You’re happy to switch every year or so to the plan that offers ticking off the box at the lowest cost. And “once I’ve spent my deductible, I don’t care how much my care costs the insurance companies.” It’s not like we’re all in this together. Once you’ve spent your share, it’s not your circus nor your monkeys.

Is healthcare screwed in America?

I’m going to say, sadly, yes. That won’t prevent me from trying, but holy hell there are just so many obstacles that stem from a system designed to extract as much revenue from every single player in America. Hospitals, doctors, insurance companies, Big Pharma, device makers, health tech companies, everything…in every investor presentation they say, “healthcare is a $2.5 trillion market, we just want to take a small slice.” When you get hundreds/thousands/tens of thousands of entities who have figured out how to take their small slice, you get American healthcare. And none of them are going to go down without a fight.

So what does this mean for today’s healthcare industry?

The other day, I was asked to envision healthcare in 10 years. I honestly threw up my hands and said I have no idea. I do know that when I’m old and in need, there’s no possible way anyone in America will be able to afford today’s flavor of American healthcare. That makes me think we either go down with a sinking ship and we’re all dead from death and destruction or, somehow, we create something new.

Alt-Healthcare. What would that look like?

It would have to be something altogether different, much like the creation of cryptocurrencies. It would have to function under different rules:

  • A lifetime commitment through yourself not your employer
  • Different incentives (professionals can’t get paid more for doing more)
  • A different health philosophy (less pills and scalpels, more food and exercise…essentially, lest Western and more Eastern which is nice because this trend is surely catching on as our culture increasingly questions status quo professionalism)
  • A different death philosophy (I don’t want to die in the hospital, I’d rather die at home and health professionals can’t view dying people as cash cows…something like 80% of your lifetime medical costs are spent in the last 6 months of your life)
  • This would need to be seeded by a small population of woke people

Although tech is a requirement for a thing like this to work, like everything nowadays, tech is just a given. It would be a mix of a new health philosophy, a new payment method/model, and a new way to optimize and improve health. More importantly, it’d be about the philosophy and the scalable building blocks that make this sustainably work for an increasingly mobile group of people over time. Creating something new is extremely fascinating to me. Call me crazy.

Looking for an example? Look at this 20 year old business that’s executing like mad.