| Health care is a hot political topic -
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| | Now getting some free coffee and bagels
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| but most of the attention focuses on how
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| | might not be that big of a deal. Most
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| Americans will get their health care
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| | people would not feel incredibly loyalty
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| costs covered. While this is important, a
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| | to a company for that favor. Besides,
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| much bigger issue often flies under the
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| | getting some free samples might actually
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| radar. The question that most people
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| | save the patient money (assuming they
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| don't ask should be 'Is our health care
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| | needed the drugs in the first place). But
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| system really designed to improve your
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| | getting business trips covered and
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| health?'
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| | receiving paychecks for 'services'. . .
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| What's the Business Model in Health Care?
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| | that's a different level of conflict.
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| Let's look at a typical business model
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| | This does not automatically translate to
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| (Yes, health care is a business).
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| | unethical behavior. Some physicians may
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| Companies are in business to make a
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| | truly stick to their morals, but how many
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| profit in exchange for products or
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| | will not?
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| services that improve people's lives.
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| | The second study from the New England
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| Whether it's a lawn mower company making
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| | Journal evaluated the relationship of the
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| it easier for you to care for your yard
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| | Food and Drug Administration with the
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| or an airline company getting you where
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| | pharmaceutical industry. Back in the
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| you need to go. The basic premise is the
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| | early 90's the FDA was completely
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| same. They help you in exchange for
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| | supported by congress - but the agency
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| payment. If they don't provide a quality
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| | wasn't big enough to do their job. So the
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| product or service they quickly run out
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| | 1st Bush administration encouraged
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| of people to sell to.
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| | relationships with the private sector,
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| There are only three ways that a business
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| | which translated to support from the
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| can increase it's profits. 1. Get more
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| | pharmaceutical industry.
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| customers or clients. 2. Increase how
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| | Today more the 50% of the FDA's budget
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| many times existing customers or clients
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| | comes from drug companies. This means
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| buy products or services. 3. Increase the
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| | that FDA doctors, who evaluate new drugs,
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| profit margin on each transaction. That's
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| | are paid by the very companies that
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| it. All business growth fits into one of
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| | produce the drugs they are evaluating. Is
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| those 3 areas.
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| | there a possible conflict of interest
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| Now let's look at those in the context of
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| | there?
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| the health care business. Presumably,
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| | In 1992 the $126 million FDA budget came
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| health care is supposed to improve your
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| | solely from congress. In the first year
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| health, which makes you less likely to
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| | of drug company support industry kicked
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| need health care in the future. So how do
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| | in about $8 million or about 6% of the
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| health care businesses grow?
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| | total budget for that year. By 2004 drug
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| Health care companies cannot really use
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| | companies were paying $232 million,
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| strategy #1. In order to get more
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| | greater than 50% of the total budget. The
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| customers there would have to be more
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| | upside is that some useful drugs, like
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| sick people in need of health care
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| | AIDS and cancer medications, are able to
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| services. That would mean that companies
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| | get through the bureaucracy faster and
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| could not promote prevention because that
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| | get out to the public. The down-side is
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| would reduce the number of sick people.
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| | that so are drugs like Vioxx, blamed for
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| They can't really use strategy #2. In
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| | the death or disability of hundreds of
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| order to increase the number of times
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| | thousands of people.
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| sick people need to buy there products or
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| | Current legislation is under review to
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| services they would have to keep from
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| | change these laws. But don't assume that
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| truly getting better.
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| | the change will be for the better.
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| They can't really use strategy #3 either.
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| | Is there a better Way?
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| In order to increase their profit margin
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| | The question really becomes, 'How do
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| on existing products or services they
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| | health care companies grow and help
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| would have to charge the insurance
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| | people improve their lives at the same
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| companies more, who would have to pass
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| | time?' The answer is very simple. Focus
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| those costs onto the consumer, who are
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| | more on prevention strategies.
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| already over-stressed with regard to
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| | The US government estimates we could save
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| medical costs.
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| | over $71 billion and prevent 14% of all
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| So how do health care companies grow
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| | premature deaths through lifestyle
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| without using the strategies of business
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| | strategies. Focus on these strategies is
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| growth? Surely, they don't deliberately
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| | a truly sustainable business model.
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| shun prevention strategies, keep people
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| | Living a prevention lifestyle is a
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| from fully recovering, or over-charge for
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| | life-long process, and therefore means
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| their services?
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| | repeat customers. It's like taking a
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| Who really supports the Health Care
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| | shower. You don't take one shower and
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| Industry?
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| | expect to be clean for the rest of your
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| A couple of recent articles in the New
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| | life.
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| England Journal of Medicine had some
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| | This is where nutrition companies,
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| interesting perspectives on the
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| | exercise gyms and health education
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| relationship between the government,
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| | companies focus their efforts. They are
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| health care providers and pharmaceutical
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| | truly helping people improve their lives
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| companies.
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| | and are growing a successful business.
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| The first report detailed a survey of
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| | This is the true 'Health Care' industry.
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| over 3,000 doctors that explored their
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| | What most people think of as health care
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| relationship with drug companies. The
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| | is really the 'Sickness Industry'. One
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| study found that 94% of doctors have some
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| | has healthy people as customers, the
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| relationship with drug suppliers. About 4
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| | other caters to sick people.
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| out of 5 physicians admitted receiving
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| | This is a business model that is good for
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| free food for themselves and their office
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| | individuals and good for the economy. But
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| and free drug samples to try out on
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| | the only way this will take hold is when
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| patients. Drug companies paid for
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| | people start to vote with their dollars.
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| business trips for more than 1 out of 3
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| | Vote for health food instead of junk
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| doctors and about 1 out of 4 in the study
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| | food, vote for treadmills instead of
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| were actually on drug company payrolls
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| | big-screen TVs, vote for tennis shoes
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| for consulting, lecturing or enrolling
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| | instead of gas to drive 1 mile to the
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| patients into clinical trials.
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| | store.
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