Basic HTML Version
Campus Review
September 19, 2012
Page 8
improvements in healthcare by adopting
highly cost-effective innovations and
treatments which are advantageous for
some patients but not for all. The danger
rests with treatments of uncertain clinical
value; these could cause a rapid increase
in the cost structure with little gain in the
productivity of healthcare. To this, one
must add economic and political resist-
ance in the United States to increasing tax
rates, which will likely make it more dif-
ficult to finance these treatments. The
effects of this phenomenon on technology
growth are ambiguous at the best and
irrecoverably negative at the worst.
This brings forth the notion of limited
resources and their allocation process.
What are the priorities, and what should
be the dynamics behind the resource allo-
cation process? Should one rely on market
dynamics? Or should one rely on, in the
absence of a perfectly competitive mar-
ket, policy makers and regulators to rec-
ognize our most urgent needs?
To us, it seems that while many interest
groups share points of view, a unifying
theme is absent from the debate. This, in
turn, is caused by a lack of mutual agree-
ment on the fundamental assumptions.
The debate between interest groups often
turns into an argument of what should be,
ignoring the reality of what is. Passions
run high, and rightly so because the goal
is to reduce pain and suffering. However,
the reality is that in order to reduce pain
and suffering, and to maintain momen-
tum, resources are needed — and, often,
decisions are based on what can be
achieved for the price paid. To these
uncertainties one must add the unknown
aspects of cost.
We are currently facing illnesses and dis-
orders, such as PTSD and obesity, whose
costs and true economic impacts are not
yet identified or measured. From time to
time, our communities are threatened by
the surfacing of a new virus or a haz-
ardous material entering the food chain.
As communities and healthcare profes-
sionals rise to meet these challenges, we
can only contemplate exactly how much
these disorders cost our society in eco-
nomic terms.
While there is a general understanding of
the challenges ahead, the extent to which
these challenges will affect our society is
unknown. In many cases, data about the
expenditures associated with health disor-
ders have not been collected until recent-
ly, and the existing data have not been
analyzed — and even when the existing
data is used, researchers and analysts have
to remember that those data banks often
exclude many small size items and record
spending only on the most prevalent
health conditions.
In the presence of these uncertainties, the
industry has but one choice; to become
more productive and cost efficient. In
recent years, many believed the only way
of achieving cost efficiency was to imple-
ment budget-cutting programs vigorously,
often leading the industry to cut corners.
However, there is another, little-dis-
cussed, course by which to achieve the
same goal. As an industry, the healthcare
sector deals with the aftermath of haz-
ardous events rather than focusing on the
prevention of these occurrences.
The possibilities of these events are not
the same for every individual. For exam-
ple, based on our heredity, weight and
diet, some of us are more likely to have a
heart attack than are others. The choices
consumers make in their daily lives,
alongside their surrounding environment,
shape these possibilities. To achieve cost
efficiency, suppliers and businesses need
to understand healthcare at the consumer
level. Advances in predictive modeling
and targeted marketing practices have
enabled the industry to know, relatively
well, what consumers want and when they
want it. These can find many applications
in healthcare when it comes to under-
standing the relationship between con-
sumers’ behavior and the level of risk to
which their health is exposed.
Implementing this predictive approach
can enable the healthcare industry to
increase its productivity and cost efficien-
cy by allocating its resources with respect
to the pattern of risk. It also can permit a
better indication of incurring costs and
expected revenues; thus, investors would
be able to invest with realistic expecta-
tions.
The benefits do not end there. Using a
predictive approach would engage con-
sumers and remind them that they are in
charge of their health. If an individual
could translate unhealthy habits into dol-
lar terms, they would have a strong moti-
vation to change their lifestyle.
There are examples of the benefits of
implementing this predictive approach in
a business model, such as the finance
industry’s ability to promote the responsi-
ble behavior of individuals through the
idea of a credit score. We are intrigued
and encouraged by the possibility of
improving the average person’s health
through her ability to understand the
financial implications of her own deci-
sions.
We are thrilled with the opportunities
offered by adopting predictive health
practices. Few cities have Atlanta’s
advantages when it comes to healthcare.
Home to the Centers for Disease Control
and Prevention, Georgia Tech, Emory
University, American Cancer Society,
Grady Hospital and several leading aca-
demic institutions — as well as being the
business capital of the southeast —
Atlanta has the knowledge and expertise
needed to lead the nation in shaping this
new branch of the healthcare sector. Just
think of possibilities and the contribution
to healthcare.
About the authors...
Dr. Ali Dadpay is an assistant professor of
Economics & Finance in the Clayton
State University College of Business.
Kristin Chick is an analyst with Abbott
Laboratories.
Healthcare, cont’d. from p. 6