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The purpose of Health Insurance should be improving Patient outcomes not managing risk

In the past few months, I've noticed an increasing number of people discussing mental health problems, and I've developed some understanding of their root causes. My personal philosophy, centred on controlling neuron firings to manage stress and pain, is grounded in the belief that this is the only aspect within our control. The rest, I argue, is illusory for humans (as discussed in my essay).

The recent months have proven to be among the most challenging in my 200+ months on this planet, our home. Consequently, I turned to Matt Haig's book, "Reason to Stay Alive," where one paragraph left a lasting impression on me. Haig notes, "The world is increasingly designed to depress us. Happiness isn’t very good for the economy..." While I find the statement "Happiness isn’t very good for the economy" debatable, I agree that a select few manipulate information to generate fear, selling products and inflating prices, perpetuating a vicious cycle.

Let’s do a thought experiment: Consider you are in 2045. The anti-ageing market is a trillion-dollar global market and most mid-fifty+ are purchasing pills with the chemical molecules of - Rapamycin, Metformin, Resveratrol, NAD boosters etc. Consumption of these pills is similar to eating food. This leads creation of Pharmacy brands, Insurance companies, Professional and Facilities networks etc. It is so ingrained in societies that people are taking loans to fulfil this want to stay young biologically and that created another hundred billion dollar landing industry. The capitalist ecosystem those who control the trillion-dollar anti-aging market are publishing impact reports - the number of years added by humans on this planet due to anti-ageing pills and further value created by those humans, prevention of suffering, pain etc

Among all these market creations and limelight, that elite capitalist ecosystem prevented the key information: the fundamental properties of these anti-ageing molecules merely mimic the benefits of low-calorie diets (Calorie restriction) and exercise to extend lifespan. This means there was no need for this trillion-dollar industry creation if the fundamental information could have been shared with the individual early. But historically, this has been the story, we have been creating a new problem to solve an old problem creating a vicious cycle of price inflation. USA’s current Healthcare per capita is a good example of creating wrong value and inflating the overall cost.

This awareness drives our approach as we stand on the verge of potentially creating a trillion-dollar market for quality healthcare accessible and affordable for a billion Indians. We aim to break the cycle of creating new problems to solve existing ones, avoiding the pitfalls of the current healthcare system in the United States.

In the past few months, I have found myself being wrong in multiple things and frankly, I have been on the happier side. Most of my conjecture or fundamental understanding about a subject and industry is purely driven by The First Principles. Based on that I defined: “Health Insurance are a tool for certain prevention of uncertain health (financial) risk (Managing Risk)”. And I kept this definition in the centre of my work. However, from Day 0, we have been working on the intersection of Healthcare and Insurance. And believed that Health Insurance should be the by-product of Healthcare especially the preventive and diagnosis continuum of Healthcare. Even with the above hypothesis, we kept the old fundamental definition of Health Insurance.

However, a few days back I structured my thoughts to understand the industry’s stakeholders from the value creation POV, and realised, I had been mistaken in considering the fundamental definition of health insurance. Now to understand the new definition of Health Insurance, we need to understand how each stakeholder creates value and why the methods of those value creations are mostly inflating the price of Healthcare per capita. Let’s list out all the stakeholders of Health Insurance

  • Healthcare Providers (Health facilities, Health Professionals)

  • Diagnosis labs

  • Pharmacies Brands

  • Healthtech companies

  • EMR/EHR Software

  • Patients

Now, if we look at the above stakeholders from a value creation POV there are massive conflicts between Patients’ values and the rest of the stakeholders’ values.

  • Hospitals (Healthcare Providers) create value by keeping patients longer in hospitals. This means there is an incentive to keep the patients longer even if there is no need.

  • Pharmacies create value by pushing the consumption of medicines longer through healthcare professionals or Healthcare facilities.

  • EHR Platform create value by blocking and creating a bottleneck and charging for future uncertain utilizations

  • Healthtech companies charge for the prescription of individual lifestyles and create new problems by fixing the existing problems.

The Patient has a single value - IMPROVEMENT of Patient’s Outcomes.

You see there is a direct conflict between the values for patients and the values for the rest of the stakeholders. And when there are conflicts of incentives/value between two parties - it becomes a zero-sum game (individuals trying to maximize their gains on the cost of others). This is one of the root causes of skyrocketing Healthcare per capita in developed and developing countries.

There is good news for countries such as India! Solving the above problem might be impossible for a developed country because they have existing legacy infrastructure, regulators, dependency, billions of dollars of investments etc. - it would be almost impossible to bring that Healthcare per capita down. However, countries such as India whose Healthcare infrastructure (Digital and Physical) is in development can avoid letting the Healthcare per capita go out of reach. That can only be possible if tech companies start participating from the inside by making sure the value for patients is in the centre and the rest of the stakeholders are aligned towards enhancing patients’ value - IMPROVING Patient Outcomes.

And right now is probably the best time to think it differently and keep the patients in the centre of everything. My last essay was on the same topic what is making us believe to solve this problem? I think we have all the technology on hand to solve this problem and unlock value by improving patient outcomes. Also, align the rest of the stakeholders to maximize the value of patients. Hence this is important for countries such as India to think of Health Insurance not as a tool for managing risk rather than Health Insurance should be a tool for improving Patient outcomes.

Returning to the initial point of this essay, I admire capitalism for its ability to endure pain and take risks for positive outcomes. However, there are ways to create value without generating new problems and inflating final prices. While I can't control others, we aim to be conscious of the unique opportunity to solve this problem without perpetuating the cycle.

Thanks for reading, if you find this informative, please share this with your network. I shall see you all the next week :)


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