Healthcare: iPhone vs Blackberry
On March 26th, movie-producer James Cameron touched the deepest part of the ocean. In the last ten years, Sir Richard Branson through Virgin Galactic shot test pilots into subspace. In that same span, Google, Verizon, Facebook, and Apple have revolutionized the country’s social fabric and information technologies. The United States of America is once again exploring and penetrating the Frontier. America is moving. All while NASA retired the space shuttle, the landline telephone declined, and smartphones usurped the Blackberry. All in the space of one ten-year CBO budget projection.
Yet other sectors, such as healthcare, lagged. What is the iPhone of healthcare delivery? Democrats won’t let you find out. Under Democrat budgets, federal healthcare expenditures go all in on the Blackberry, which is going the way of the Commodore 64. CEO Thorsten Heins of Research in Motion Ltd., the makers of the Blackberry, indicated a major strategic redirect to pull away from direct consumer markets to focus its efforts in the niche market of ‘enterprise users’. ‘Enterprise users’ are corporate reps buying a product for their employees, i.e. with their own money for someone else, incentivizing cost reduction but not quality. IPhones and Android devices, products consumers buy for themselves with their own money, blew Blackberries out of the personal consumer market. Without the incentive to innovate, Blackberries fell far behind in quality, and newer technologies, competing in both cost and quality, lapped the once ubiquitous product. RBC Capital Markets analyst Mike Abramsky says Research in Motion Ltd. “may have lost too much momentum to recover.”
Have current forms of health insurance and healthcare delivery lost too much momentum to recover? If tax treatment was equalized and regulatory burden relieved, we would see government and employer-provided health insurance go the way of the Blackberry– as a niche option for a niche market. Employer-provided health insurance is closer to the Blackberry model, but government healthcare funding is even more inefficient. Government uses someone else’s money to buy something for someone else. These programs exist in a culture that is tenably linked to quality concerns by electoral means (a link an upheld Obamacare would shatter with its labyrinth of unaccountable bureaucracies), but not at all to cost concerns, permitting the current structural cost escalators, Medicare’s fee-for-service and Medicaid’s federal cost-matching, to thrive. Thus, quality deteriorates, costs explode, and the product is crippled.
The news isn’t all bad. Innovations abound, such as eICUs for critical care shortages, cancer drugs like vemurafenib, and information-sharing through report cards for doctors and hospitals. But are we settling for Blackberries when we could be surfing the net on iPhones and iPads? Blackberry was a wonder and revolution when it hit the markets. Yet in ten years, something better replaced it.
In a world where FedEx, DHL, UPS, and email can coexist with the Post Office, and landline home telephones coexist with wireless devices, why can’t innovative healthcare insurance and delivery models coexist with the safety nets of Medicare and Medicaid? Ham-handed, one-size-fits-all regulation prevents this. Rather than adjusting the regulatory model, Democrats go all in on turning healthcare into another utility, demanding ever-exorbitant funding mechanisms to make it happen. The result is fiscal recklessness supplemented by the Fed’s printing presses and China’s indulgence. The frictional costs to the economy such as tax revenues to the government, bureaucratic overhead, and opportunity costs are hidden or ignored. But those costs linger like mold inside the walls. As it multiplies it stinks, until it affects your health, until your house is no longer livable. The Tea Party found the mold and started a movement to eradicate it. With Obamacare, the Democrats got caught cultivating the spores in their laboratory.
It’s a very real challenge. Republicans won’t inspire a majority of Americans with a platform of mold removal. But how do you quantify and articulate the unknowable possibilities of the future as positives? How do you market creative destruction in a way that doesn’t frighten the electorate? You use symbols. Symbols such as the Blackberry and the iPhone.
This battle will play out in the 2012 presidential election, whatever decision the court announces on Obamacare in June. If Obamacare is upheld, conservatives will storm the polls for its repeal. If Obamacare is shot down, liberals will clamor for liberal justices to back the next effort at a single payer system. Regardless of the courts, this issue will permeate the electoral landscape for years to come.
“We want to get government out of the way,” is a typical Republican line. That’s not sufficient. It’s an incomplete thought. It’s a promise of an action with no corresponding end. “We want to get government out of the way so America’s industries can innovate the iPhone of healthcare.” That message becomes a vision, something to follow, not a mundane housekeeping task to check off the list.
Without heavy-handed government regulation or massive federal funding, private industry has conquered sea, space, and technology. Where could healthcare go if government got out of the way?