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Leadership

The One Important Thing Missing From the Health Care Debate

By
Jeffrey Pfeffer
Jeffrey Pfeffer
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By
Jeffrey Pfeffer
Jeffrey Pfeffer
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August 26, 2016, 1:00 PM ET
Florida Residents Sign Up For Affordable Care Act On Deadline Day
Alberto Abin walks out of the UniVista Insurance company office after shopping for a health plan under the Affordable Care Act, also known as Obamacare, on December 15, 2015 in Miami, Florida.Photograph by Joe Raedle — Getty Images
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You may have seen the big news on health care: Aetna is going to stop offering individual health insurance policies on the health exchanges in 11 of the 15 states where it operates. Aetna (AET) follows the lead of another large health insurer, United Health (UNH), which announced in April that it was withdrawing from almost all of the health insurance marketplaces where it operated.

The problem: the companies were losing money (or weren’t making enough) to continue to offer health insurance coverage. Meanwhile, health insurance rates for individuals are soaring, with insurance companies seeking rate increases of 20 to 40%. And on many health exchanges, with the withdrawal or bankruptcy of health insurance providers, consumers will have little choice—frequently just one plan to choose from.

As for employers, they’re trying to shift some of their costs onto employees, through higher premiums, larger deductibles, and greater co-pays. My employer, Stanford University with its $22 billion endowment, raised the co-pay for seeing a specialist last year by 50% and the cost of refilling a mail order prescription for a non-formulary drug by 33%.

For more on Health, watch this Fortune video:

Medicine takes a backseat to costs

More than a decade ago, an aptly titled article, “Monetized Medicine: From the Physical to the Fiscal,” noted the extension of industrial engineering logic from the factory to the hospital and physician’s office as health care became “market driven” in an attempt to hold down runaway health care costs. Although this effort was clearly a failure in reality, it was a symbolic success as doctors and other health care providers have lost power while economists and professional managers have gained increasing control over the health care system and the language used to discuss health care. For instance, a Google (GOOG) Trends search I did shows that since 2004, searches for “health care costs” far exceed searches for “health care outcomes,” and an even bigger gap exists using Google’s Ngram viewer to consider the frequency of these terms in books.

Should we care about language, terminology, and what makes the news? That health care is mostly about exchanges, competition, cost curves, costs, and, yes, politics—surveys show that support or opposition to Obamacare is strongly predicted by political party identification. I believe the answer is “yes.”

Read More: General Motors and NASA Are Lending a Robotic Hand to Healthcare

Ignoring patients’ health

When Don Petersen was nearing the end of his career as CEO of Ford (F), he gave a talk at Stanford about his successful efforts to turn around the company which was bleeding red ink when he took over. He noted that in his first senior management meeting as CEO (which he admitted was not that much different than any other meeting he had attended), a long period passed before the word “car” or “automobile” was mentioned.

Petersen noted that as long as a car company didn’t talk about cars but instead about margins, returns, and so forth, it was doomed—because it would place insufficient emphasis on product. This example reprised a comparison of oil company success in discovering oil related in In Search of Excellence and in speeches by Tom Peters. Peters commented that the oil company that did better than a competitor in finding oil and building its reserves was distinguished not by equipment or technical expertise but by how much time at senior meetings was devoted to the topic of oil discovery.

Language matters. Language focuses people’s attention. What senior managers talk about affects what their subordinates measure and emphasize, in the quest for leaders’ approval and individual career success. What isn’t talked about gets ignored and what is ignored suffers from inattention.

So here’s what I wish would get more attention from the news media and for that matter from employers and health insurers in their decision making: human health and well-being.

Read More: Healthcare Venture Capitalist Michael Steinmetz Passes Away

Surge in bankruptcies

Every article on the number of uninsured—and there are still millions even after the passage of the Affordable Care Act—and every decision that affects people’s access to health insurance should note that research estimated that in the late 2000s, people without health insurance were 40% more likely to die than those with health insurance, even after statistically controlling for age, income, education, health status, body mass index, exercise, smoking, and alcohol use. That means, given the number of uninsured at the time, that there were approximately 45,000 excess deaths annually because U.S. residents lacked access to health care.

Every article and discussion held within companies and by their health benefits consultants about cost shifting and increases in insurance premiums and copayments should consider the fact that in 2007, more than 60 percent of all personal bankruptcies filed were from medical costs and between 2001 and 2007, the share of bankruptcies “attributable to medical problems rose by 49.6%.” And as employers consider shifting ever more costs to individuals, they might consider research that shows that “increases in deductibles will lead to an overall decrease in optimal care-seeking behavior as families juggle healthcare costs with a weak economy and stagnating wages.”

Maybe the fact that health care has become more about money than health might help explain the fact that American’s life expectancy has stopped increasing and for some demographic groups, has started to decline.

As George Orwell noted in his famous essay, “Politics and the English Language,” “political speech and writing are largely the defence of the indefensible” and that “language can also corrupt thought.” That seems to be precisely what has occurred in much health care decision making and discussions as people’s lives and financial well-being get short shrift. While human health and wellbeing, and human life, may need to be balanced against economic realities, it just might be time for money and economic considerations in health care to be balanced by concern for human life and suffering.

Read More: Apple Re-Hires Flipboard Co-Founder for Healthcare Push

Jeffrey Pfeffer is Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University. His latest book is Leadership BS: Fixing Workplaces and Careers One Truth at a Time.

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