The Black Hole
Our rising healthcare costs in the US are akin to a giant blackhole, consuming everything in its path. In 2023, we spent $4.8 trillion on healthcare, almost 20% of our economy. The average American spent over $14,000. Let’s put that number in perspective.
If we compare US healthcare spend against other industries, here’s how it stacks up:
- It’s ~3x what we spend on energy
- It’s ~5x what we spend on education
- It’s ~6x what we spend on defense
In other words, it’s massive. If we compare it to the rest of the world, the US is in a class of its own. We spend as much on healthcare as the next 14 largest countries in the world. That list includes China, Germany, Japan, UK, France, India, Canada, Brazil, Italy, Russia, Australia, South Korea, Spain and Mexico, and spans nearly 4 billion people.
And this behemoth spend is currently growing at 7.5% a year, much faster than the rest of our economy.
Black holes are giant masses in space where gravity is so strong that nothing, not even light, can escape. When an object gets close to a black hole, it stretches and compresses as it’s being sucked in through a process called “spaghettification”. When it crosses the Event Horizon, it’s beyond the point of no return and poof – it’s gone.
It feels like we are squarely in the spaghettification stage, and if we don’t change course quickly, it will be too late and we’ll be consumed.
There are so many good things about our healthcare system, despite its size and inefficiency, that we need to avoid throwing the baby out with the bathwater. We need to preserve our propensity to innovate, while addressing the inefficiencies of a system that despite all the money we throw at it still produces outcomes well below our peers. Despite being #1 in terms of the amount of money we spend on healthcare, we are 40th in terms of average life expectancy at ~77 years. Way below Japan at 85, Switzerland at 84, and Australia at 83.
How do we change course?
While it might sound self-serving, the only solution I can think of is technology, and in particular, Artificial Intelligence.
It’s the only force with enough power to withstand the inertia of our current healthcare system. AI has the potential to seep its way into our healthcare system and turn chaos and inefficiencies into knowledge and opportunities – creating disruption from within. Generative AI, and in particular Large Language Models, by their very nature are designed to take disparate data and produce rational insights almost immediately, which is exactly what is needed by physicians and care teams who are drowning in a sea of data.
The vast majority of our problem is inefficiency. We waste enormous amounts of time and money in the US. Far too often, physicians are not armed with the data they need to make decisions. Far too often, patients fail to get the right care at the right time. Far too often, we are far too late in treating patients.
As a result we make lots of mistakes, and when it comes to health, mistakes are costly.
The system is also too manual and antiquated. When my wife was diagnosed with Breast Cancer 10 years ago, I felt like I was in a time warp going back to the 1980’s everytime I walked into the hospital. It was as if time stood still and the technological advancements that had permeated every other part of my life had somehow bypassed healthcare. We were constantly filling out forms, and refilling out forms, and refiling out forms…
Antiquated manual processes are also costly – think Blockbuster. In the old days, we used to drive to Blockbuster to rent a video. Someone had to make the video, produce it, ship it to the store, manually put it on the shelf, have someone in the store waiting for a customer to drive to the store and rent it, be there to restock it, and so on. With Netflix, all of that time and effort and cost are removed.
To make fewer mistakes and be more automated, we need to infuse AI throughout the healthcare system, starting with diagnostics, as they sit at the heart of every major clinical decision. Physicians routinely order blood tests, CAT scans, MRIs, genomic tests, pathology stains, etc. before they decide how to treat a patient. The smarter those tests are, the more integrated they are, the more personalized they are, the more they incorporate the benefits of AI to help doctors contextualize their results, the less mistakes we will make, saving lots of money, and yeah, helping patients live longer and healthier lives in the interim.
If we can deploy AI broadly across all diagnostics in the US, we have a real chance to fix our US healthcare system, and in so doing avoid the Event Horizon.
If not – poof…
