The Overall Problem Of Incentive Misalignment

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The overall problem of incentive misalignment cited above has negative impacts for almost all stakeholders in the healthcare industry. Consumers have become notoriously bad shoppers of healthcare, as they do not bear the real costs of their care or treatments and therefore have no incentive to optimize their healthcare costs. However, even if consumers were to become more shopping savvy, it would ultimately have a very limited impact on such a fragmented and opaque system where reliable and accessible information about relative pricing and outcomes is almost nonexistent. Nor are doctors immune to this incentive misalignment. Regulation and increased litigation around doctor malpractice has cemented an industry obsession with compliance…show more content…
Considering the full spectrum of tests and treatments in the industry, it is clear the costs are huge. Though improved care coordination is an obvious solution and many organizations have begun to offer coordinated care programs, the effectiveness of such programs is limited, given that they are layered on top of such a fragmented and dysfunctional system. Even electronic medical records, surely a powerful tool for improving outcomes and eliminating redundancies, are rendered useless by siloed, competing IT systems with no possibility of integration or sharing across systems greatly impede potential value improvements III. The Industry’s Most Vulnerable: Patients with Chronic Conditions Patients with chronic conditions are unique in the healthcare system because they are dealing with a life-threatening but manageable condition that requires constant engagement with the healthcare system. As such, it is no surprise that these patients constitute the largest share of healthcare spending costs that are largely borne by society at large. Patients with chronic conditions are living with a disease that impacts every aspect of their lives; though many are able to live seemingly normal lives, anyone who is familiar with a diabetic or HIV+ individual understands the deep emotional and physical toll of dealing with the disease day to day. Despite diagnosis of these conditions being tantamount to a death sentence (albeit very far in the future), patients with
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