How to Think Constructively About Healthcare – Umair Haque – HarvardBusiness.org

Posted on August 7, 2009 by

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Let’s examine the basic economics of healthcare (by no means the whole story, just enough to inform basic insight).

Unless you’ve been living under a rock, you’ve heard by now that, where the majority of developed countries spend between 8–10% of GDP on health, America spends ~16%.

American health expenditure diverged from the rest of the world circa 1980. At that point, many other developed countries decided not to deregulate healthcare, while the US deregulated it, softening or removing limitations on advertising, consolidation, entry, pricing, and patent expiration, accompanied by a shift to privatization in many markets, to benefit from “managed competition.”

The result was the birth of a new industry. The rationale for the deregulated industry was simple and explicit. It was supposed to offer significant efficiency and productivity gains, delivering more bang for the buck. Has it?

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Great article by Umair Haque, Director of the Havas Media Lab. Note the challenges and obstacles to innovation in healthcare that he points out.

-Tune The Future-

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