Healthcare Napkins 2020

Nine years ago, Tony and
I drew a bunch of
pictures on napkins to
help explain American
health care reform.
More than 4 MILLION
people downloaded our
drawings, and we won
“World’s Greatest
Presentation” from
BusinessWeek. YAY!
Now that affordable
healthcare is again
under siege, we
decided to take
another look...
Yep.
Lots of
pictures!Pictures
will help!

CRITICAL CONCEPT #1:
HEALTHCARE IN
AMERICA IS
A BUSINESS. CRITICAL CONCEPT #2:
IN 9 YEARS,
SOME THINGS
HAVE GOTTEN
BETTER.
IN 9 YEARS,
A LOT HAS
GOTTEN
WORSE.
IN THE END, YOU’RE
ON YOUR OWN -
AND THERE ARE A
FEW THINGS YOU
NEED TO DO...
IN OUR ANALYSIS, THERE ARE 4 BIG THINGS YOU NEED TO KNOW:

FIRST,
WHY LOOK
AGAIN
NOW?
Access to affordable,
useful health insurance is
at risk as Congress looks
to dismantle the
Affordable Care Act. To account for rising costs,
more healthcare businesses
are shifting costs and
responsibility to you. (And
you’re the one who’s sick!)
Because of
disqualifications,
the sickest
people can’t get
help at all.
Rising costs eat into
hard-earned consumer
wage gains & company
profits.
More people
uninsured, which we all
pay for in less obvious
ways.
We risk returning
to the bad old days:

When we did this last time, this was our
single biggest revelation... (and it still is!)
HEALTHCARE IN AMERICA
IS A BUSINESS*.
*In all the policy debates,
it’s amazing how often
we forget this
foundational fact. It
defines everything else.

The American healthcare business is governed
by a simple equation:
I get sick. My Doc fixes
me.
My Doc gets
paid.
But over the past several years, there’s been a
shift in the equation...
That happened because healthcare is really
two different businesses:
As providers and payers fight, my costs keep
going up.
Insurance jumped in between me and my doctor.
Insurance now rations my treatment and health costs.
There’s the business of
providing health…
… and then there’s the
business of providing
payment.
Me, my health, and my money
sit in between these two businesses.
I’m the only one adding money INTO
the equation, so I get squeezed.

TO SEE WHY THIS
IS SO, LET’S TAKE A
LOOK AT THE AMERICAN
HEALTHCARE “SYSTEM...”
Ready!Pens
ready?

Here’s how the “system” actually works. (It’s not a system at all; it’s more like a cluster of barely connected
islands!)
I don’t feel so well...
Yea! I feel
better!
Ugh! I feel
worse!
Let’s try the HOSPITAL
Our new device
should … !
Our new test
should … !
$$ - BILL - $$
Insurance contract with
Docs pays M% of A
… but only N% of B & C
… and zero for D (out of
network...too bad!)
START HERE:
What you see...
What you DON’T see...
See a DOCTOR
See another DOC
See more DOCS
Labs, labs, labs ...
Imaging, imaging, imaging ...
Try drug A, try drug B, try drug C …
Let’s do procedure D, procedure E ...
$$ - BILL - $$
Hospital pays P% of D
… but only Q% of E
… and R% of F
… but zero for G
(experimental...too bad!)
$$ - BILL - $$
PBM (who’s that?) says
you pay $S for drugs H,
I & J (which may not be
the lowest price, but
the pharmacist can’t tell
you that.)
$$ - BILL - $$
YOU OWE
$XXXXXX
… maybe … or maybe
not.
PAYER:
Check with
me first!
What you HOPE
to not see...
What
you
DREAD
seeing...
Our new drug
should … !
(Not for
long…)
PAYER:
Check with
me first!
PAYER:
Check with
me first!

Here’s how the “system” actually works. (It’s not a system at all; it’s more like a cluster of barely connected
islands!)
I don’t feel
so well...
Yea! I feel
better!
Ugh! I feel
worse!
Let’s try the HOSPITAL
Our new device
should … !
Our new test
should … !
$$ - BILL - $$
Docs pays M% of A
… but only N% of B & C
… and zero for D (out of
network...too bad!)
What you see...
What you DON’T see...
See a DOCTOR
See another DOC
See more DOCS
Labs, labs, labs ...
Imaging, imaging, imaging ...
Try drug A, try drug B, try drug C …
Let’s do procedure D, procedure E ...
$$ - BILL - $$
Hospital pays P% of D
… but only Q% of E
… and R% of F
… but zero for G
(experimental...too bad!)
$$ - BILL - $$
PBM (who’s that?) says
you pay $S for drugs H,
I & J (which may not be
the lowest price, but
the pharmacist can’t tell
you that.)
$$ - BILL - $$
YOU OWE
$XXXXXX
… maybe … or maybe
not.
PAYER:
Check with
me first!
What you HOPE
to not see...
What
you
DREAD
seeing...
Our new drug
should … !
(Not for
long…)
PAYER:
Check with
me first!
PAYER:
Check with
me first!
● What does this drug / device / test cost me?
● Where’s the data comparing each option to
the next best alternative?
● Does my doctor have a financial incentive to
choose one option over another?
● How much does this hospital charge for ALL of its services?
● How does that compare to similar hospitals on price & quality?
● Is this hospital / doctor even good at this procedure compared
to others?
● WTF is a PBM and why are they keeping me from getting the
lowest price for my meds?
● How come I NEVER KNOW when to pay these bills?
Aside from almost everything, what’s
wrong with this picture?
[NOTE: this complexity isn’t purely accidental. It
protects the status quo by making informed
decision making much harder than it should be!]

IN 9 YEARS, SOME THINGS
HAVE GOTTEN BETTER.
Here’s the
good news!
There is some light at
the end of the tunnel...

There has been some improvement on
pay-for-performance by Providers.
More of my health records are digitized,
making my info more accessible & portable.
Nearly 20,000 physician groups & hospitals
are now in at least 1 risk-sharing arrangement.
Public awareness around the importance of
covering pre-existing conditions has grown.
Understanding HOW to
manage health risks - even
for small populations - is a big
adjustment for providers!
This is good for me, because it
helps get everyone on the side
of trying to keep me healthy.
One (small) part of
Obamacare said that if
doctors and hospitals
wanted federal money,
they had to focus more on
keeping me healthy,
instead of just collecting
fees for treatment and
procedures. Getting all my data digitally
collected in a single Electronic
Health Record is a huge step
forward.
Few people paid attention to
this when it was mandated
under Obamacare. But when
someone tried to take it away,
we all got smart pretty fast!

IN 9 YEARS, MORE THINGS
HAVE GOTTEN WORSE.
Now for
the bad
news...
That light could be an
oncoming train...

Costs are still rising on
BOTH sides of the balance. New innovations have a big
impact for SOME people, but at
what cost for ALL people?
I thought all this was to keep costs down!?
Manufacturers target areas with highest profit
potential, not necessarily greatest consumer need!
Specialty
drugs
Gene
therapy
Imaging
tech

Our complex, fragmented insurance billing means 30¢
of every $1.00 spent on healthcare goes to admin!
HOORAY!
The ACA insured nearly 20 million people!
DRATS!
Our multi-payer system means we’re spending even
more just to manage the benefits.

Americans utilize the same amount of healthcare as other developed
countries, but we pay a LOT more for the same products & services!
Translation: IT’S THE PRICES!!!!
Compared to other developed countries, we pay...
60% more for similar hospital services! 2-6X more for the exact same drugs!

More costs and care responsibility will
shift to consumers; “empowerment”
will feel a lot more like abandonment.
THE BIGGEST TAKEAWAY?
YOU’RE ON YOUR OWN!

THERE ARE A FEW CLEAR
THINGS YOU NEED TO DO.
Prepare
yourself!
Here’s where YOU come
in to this new picture:
Don’t
despair!

#1 thing: To make
healthcare work
better, consumers
(that’s us) need to
be able to act like
consumers.
Consider how hard other industries (hospitality,
airlines, retail) compete for our business.
Shouldn’t that apply to healthcare?

DEMAND price transparency! DEMAND apples-to-apples data on products!
DEMAND real innovation! DEMAND actual insurance.
It’s impossible to be an empowered consumer is you don’t know
what you’re paying for what.
Put an end to hidden, negotiated rates between entities that don’t benefit us!
Prove that a new device, procedure, or drug is really worth
10-times the next best alternative.
Innovation works best in a truly open and transparent market.
Don’t let healthcare businesses simply build new legal & regulatory
barriers that perpetuate the broken system.
Yes, Big Pharma -- we mean YOU.
Don’t allow insurance companies to get away with selling sham
policies that only “check the box” on providing coverage.
It’s called “insurance” for a reason. Otherwise we’re just wasting a lot of money
on a false sense of security.

Demand that your employer use its influence
to make these changes happen ASAP!
Most of us can’t “vote” on coverage. But our employers can. Employers purchase
the majority of insurance policies. When they say jump, the industry jumps!

Demand a meaningful safety net for everybody!
Misfortune should not equal financial ruin!
Other countries manage this. Seriously, why can’t we?

If it works for everything else you buy, why not healthcare?
Act like a consumer.
Reward good companies.
Punish the bad ones.

Anthony Jones is an experienced healthcare
executive as well as founder and CEO of FRONTIVE,
a healthcare IT and AI company using voice to
simplify health management for consumers.
Over more than 25 years, he has held senior
positions at Deloitte Consulting, Scient and Philips
Healthcare as well as consulted to Fortune 500
companies on strategy and growth. Oh yeah, he has
an MD from Johns Hopkins University.
C. Anthony Jones
tony.jones@frontive.com
www.frontive.com
Dan Roam is author of five international
bestsellers including THE BACK OF THE NAPKIN,
the best innovation and creativity book of the year
according to BusinessWeek and Fast Company.
Dan has helped leaders at Microsoft, Google, GE,
the US Navy, and the United States Senate solve
complex problems through visual thinking. Dan
and his whiteboard have been featured on CNN,
MSNBC, ABC News, and NPR.
2009 2018 2009 2018
Dan Roam
dan@danroam.com
www.danroam.com

Healthcare Napkins 2020

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