Obama will need a lot of help to fix our cost of health care.


An idea for that help…courtesy of McKinsey & Company

In the latest McKinsey Quarterly, there is an article entitled, “Health care in China: Entering uncharted waters.” Well, it may not be charted, but we have a real good template for what’s going to happen there.

Today, the Chinese cost of health care is a mere fraction of the $2.8 trillion we have here in the states. But that’s about to change; the article began:

China’s health-care sector continues to develop at an astonishing rate: spending is projected to grow from $357 billion in 2011 to $1 trillion in 2020. From pharmaceuticals to medical products to consumer health, China remains among the world’s most attractive markets, and by far the fastest-growing of all the large emerging ones. (See link below for full article)

The good folks at McKinsey are business strategy consultants. They help their clients identify and exploit markets. As for health care, while some of their very smart people may have some idea how to eliminate up to 80% of health care spending, they have no client that is interested in doing that. Rather, they’re helping their clients better understand and exploit the business opportunity that bad health is providing. The article continues:

Three themes will shape China’s health-care market: the continuation of economic and demographic trends, further health-care reform, and the policies articulated in the government’s 12th five-year plan. Some of these forces—such as improvements in infrastructure, the broadening of insurance coverage, and significant support for innovation—will have positive implications for multinational companies. Others—for example, pressure on pricing and the rise of local champions—will have negative implications.

The U.S. federal government spends close to one trillion a year on health care, far more than we spend on our armed forces.

An idea is born. While reading this article, I was thinking that we should figure out a way to have the best minds in America solving our biggest problems—such as the cost of health care.

How can we make solving our health care crisis in the USA more financially attractive for companies like McKinsey than exploiting the health care market in China?

Best and Brightest. As you may know, McKinsey & Company has a reputation for hiring the best and brightest consultants in the world, then putting them to work solving the toughest problems for some of the world’s largest organizations. So why aren’t they working on the single biggest problem that our government is facing?

Maybe the United States should hire McKinsey & Company to tackle the problem of reducing the cost of health care in our country. According to the latest figures, our state, local and federal governments pay for roughly half of our $2.8 trillion cost of health care. And the Feds pay the biggest share of all—roughly one-third of the total cost of healthcare in the United States—a whopping $900 billion.

As the largest “payer” when it comes to health care, our government (and all of us tax payers) deserve to have the best and the brightest working on the biggest problems. And for the USA, the cost of our health care is right up there.

Blueprint for a solution. So what if President Obama quickly learned all about how chronic disease could be prevented or reversed with a simple change in diet. Next, he would need to recruit a new Secretary of Agriculture and a new Surgeon General—new blood that truly “gets it” when it comes to promoting health. Then he could hire a top consulting firm like McKinsey to develop and help to execute a strategy to lower our cost of health care—using the simple plant-based solution—ASAP.

Financial incentives. I am proposing a two-part fee for the consulting firm:

  1. A fixed fee of $40 million per year.
  2. Bonus of one half of one percent of the annual savings.

Over a four year period, they would earn $160 million in base fees plus the all important bonus. If they were able to generate a grand total of $200 billion savings during that four year period; their bonus would be a cool one billion dollars—six times their base fees. After four years, the firm would have earned $1.16 billion but would have helped to steer our nation in the direction of capturing annual savings of $2 trillion down the road.

That’s what can happen when you provide empowerment and powerful incentives to some of the smartest business people in the world.

The Bottom Line. Our politicians will never be able to get this done. And only a second term president has even a ghost of a chance of making it happen (See earlier blogpost). The steps necessary for our nation to save $200 billion in health care costs can only be handled by an empowered organization with a powerful incentive to succeed.

$$ Additional Savings. Bear in mind that the $200 billion in savings (over 4 years) is just the amount saved by the U.S. government. There would be an additional $400 billion in savings that would be saved by the other payers of our nation’s health care bills: Employers, state & local governments and individuals.

The impact on the economy would be amazing. Sure we’d lose lots of health care jobs at a steady clip, but they would be replaced by an even greater number of new jobs in industries that would then be able to compete more effectively in the global marketplace.

And we’d just be getting started. Ultimately, the annual reduction in our nation’s health care spending would approach two trillion dollars a year. Additionally, we would have taken some huge GREEN strides in the right direction—the kinds of progress that will enable the planet to sustain life as we know it for the longterm.

A final thought on China. First, we exported our toxic western diet and made them all fat and sick. Now we’re talking about sending our health care folks over there to exploit their booming health care market. Maybe it’s time for us to show the entire world the real solution for health care and its billions of unnecessary deaths and its trillions of wasted dollars.  My 646th consecutive daily blog

Handy 4-piece take-charge-of-your-health kit—from Amazon.com

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J. Morris Hicks, working daily to promote health, hope and harmony on planet Earth.

For help in your own quest to take charge of your health, you might find some useful information at our 4Leaf page or some great recipes at Lisa’s 4Leaf Kitchen.

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Blogging daily at hpjmh.com…from the seaside village of Stonington, Connecticut – Be well and have a great day.

—J. Morris Hicks, board member, T. Colin Campbell Foundation

About J. Morris Hicks

A former strategic management consultant and senior corporate executive with Ralph Lauren in New York, J. Morris Hicks has always focused on the "big picture" when analyzing any issue. In 2002, after becoming curious about our "optimal diet," he began a study of what we eat from a global perspective ---- discovering many startling issues and opportunities along the way. In addition to an MBA and a BS in Industrial Engineering, he holds a certificate in plant-based nutrition from the T. Colin Campbell Center for Nutrition Studies, where he has also been a member of the board of directors since 2012. Having concluded that our food choices hold the key to the sustainability of our civilization, he has made this his #1 priority---exploring all avenues for influencing humans everywhere to move back to the natural plant-based diet for our species.
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