February Jobs Report-U.S. Hiring Remains Strong

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The labor market showed resiliency in February, adding 275,000 jobs, a sign that economic growth is still solid.

If the economy is slowing down, nobody told the labor market.

Employers added 275,000 jobs in February, the Labor Department reported Friday, in another month that exceeded expectations.

It was the third straight month of gains above 200,000, and the 38th consecutive month of growth — fresh evidence that after surging back from the pandemic shutdowns, America’s jobs engine still has plenty of steam.

“We’ve been expecting a slowdown in the labor market, a more material loosening in conditions, but we’re just not seeing that,” said Rubeela Farooqi, chief economist at High Frequency Economics.

The previous two months, December and January, were revised down by a combined 167,000 jobs, reflecting the higher degree of statistical volatility in the winter months. That does not disrupt a picture of consistent robust increases, which now looks slightly smoother..

At the same time, the unemployment rate, based on a survey of households, increased to a two-year high of 3.9 percent, from 3.7 percent in January. A more expansive measure of slack labor market conditions, which includes people working part time who would rather work full time, has been steadily rising and now stands at 7.3 percent.

The unemployment rate was driven by people losing or leaving jobs as well as those entering the labor force to look for work. The labor force participation rate for people in their prime working years — ages 25 to 54 — jumped back up to 83.5 percent, matching a level from last year that was the highest since the early 2000s.

Average hourly earnings rose by 4.3 percent over the year, although the pace of increases has been fading.

“We’ve recently seen gains in real wages, and that’s encouraged people to re-enter the labor market, and that’s a good development for workers,” said Kory Kantenga, a senior economist at the job search website LinkedIn. As wage growth slows, he said, the likelihood that more people will start looking for work falls.

As late as last fall, economists were predicting much more modest employment increases, with hiring concentrated in a few industries. But while some pandemic-inflated industries have shed jobs, expected downturns in sectors like construction haven’t materialized. Rising wages, attractive benefits and more flexible work schedules have drawn millions of workers off the sidelines.

Elevated levels of immigration have also added to the labor supply. According to an analysis by the Brookings Institution, the influx has approximately doubled the number of jobs that the economy could add per month in 2024 without putting upward pressure on inflation, to between 160,000 and 200,000.

Health care and government again led the payroll gains in February, while construction continued its steady increase. Retail and transportation and warehousing, which have been flat to negative in recent months, picked up.

No major industries lost a substantial number of jobs. Credit intermediation continued its downward slide — that sector, which mostly includes commercial banking, has lost about 123,000 jobs since early 2021.

That doesn’t mean the employment landscape looks rosy to everyone. Employee confidence, as measured by the company rating website Glassdoor, has been falling steadily as layoffs by tech and media companies have grabbed headlines. That’s especially true in white-collar professions like human resources and consulting, while those in professions that require working in person — such as health care, construction and manufacturing — are more upbeat.

“It is a two-track labor market,” said Aaron Terrazas, Glassdoor’s chief economist, noting that job searches are taking longer for people with graduate degrees. “For skilled workers in risk-intensive industries, anyone who’s been laid off is having a hard time finding new jobs, whereas if you’re a blue-collar or frontline service worker, it’s still competitive.”

The last few months have been studded with strong economic data, leading analysts surveyed by the National Association for Business Economics to raise their forecasts for gross domestic product and lower their expectations for the trajectory of unemployment. It’s occurred even as inflation has eased, leading the Federal Reserve to telegraph its plans for interest rate cuts sometime this year, which has raised growth expectations further.

Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas, helped tabulate the survey responses. He said the mood was buoyed partly by fading trepidation over federal government shutdowns and draconian budget cuts, after several close calls since the fall. And he sees no obvious reason for the recovery to end soon.

“Once it starts going, it keeps going,” Mr. Jebaraj said. “You had this external stimulus with all the trillions of dollars of government spending, Now it’s sort of self-sustaining, even though the money’s gone.”

As Medicare Advantage’s shortcomings echo in the press, key legislators still push to privatize traditional Medicare

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A story in Rolling Stone last month offered an ominous prediction about our nation’s health care. “The right-wing policy agenda written for a new Donald Trump presidency would ‘greatly accelerate’ efforts to privatize Medicare,” Andrew Perez wrote.

That story should be seen by the millions of seniors who might not read Rolling Stone but who have traditional Medicare coverage with a supplemental policy that pays for virtually every medical bill when they get sick. Those are the people who have not yet been enticed into Medicare Advantage plans with promises of groceries and gym memberships but with little or no notice about the delays in care and the up-front, out-of-pocket costs common in many plans.

As I pointed out in an earlier story, there are roadblocks to care that have been reported by hospitals that were no longer accepting Medicare Advantage plans from some companies.

The CEO of the Brookings Hospital System in Brookings, South Dakota, was candid: MA plans “pay less, don’t follow medical policy, coverage, billing, and payment rules and procedures, and they are always trying to figure out how to deny payment for services,” he said.

Yet, in his piece titled “Republicans Are Planning to Totally Privatize Medicare – And Fast,” Perez warns that privatizing Medicare is a goal conservative and right-wing interests have promoted since the 1990s, when former House Speaker Newt Gingrich, no fan of Medicare, predicted that the program would “wither on the vine because we think people are voluntarily going to leave it.”  

Indeed, tens of millions of seniors have enrolled in or been forced by their former employers into Medicare Advantage plans, and even the 30 million or so seniors who still prefer to be in traditional Medicare, with its no-strings-attached coverage, may one day be forced to join the ranks of the MA crowd.

It’s time to once again sound the alarm, as Perez has done, that the government program that has brought millions of beneficiaries health insurance and security for more than five decades could eventually disappear. 

Perez points out that one item buried in the 887-page Heritage Foundation blueprint written to inform a potential new Trump administration has attracted little attention so far. It is a scheme to “make Medicare Advantage the default enrollment option” for people who are newly eligible for Medicare, he wrote. 

David Lipschutz, associate director of the Center for Medicare Advocacy, says the Heritage plan would hasten privatization. “Upon becoming eligible for Medicare now everyone starts with traditional Medicare as the default but can opt out of that program and later choose an Advantage plan,” Lipschutz says. The Heritage proposal, however, would have people start with Medicare Advantage plans, apparently with the opportunity to opt-out. With this arrangement, you can see how easy it would be for Medicare, as we know it, to ‘wither on the vine’ since many people new to Medicare are not well versed in the difference between the two options and instead are swayed by the TV advertising beckoning them to Medicare Advantage plans. 

Making those privately operated plans the default “would hasten the end of the traditional Medicare program as well as its foundational premise: that seniors can go to any doctor or provider they choose,” Perez writes, noting that such a change also “would be a boon for private health insurers that generate massive profits and growing portions of their revenues from Medicare Advantage plans.” 

Lipschutz agreed the plan would “greatly accelerate” Medicare privatization, noting that the Heritage Foundation’s selling points are “internally inconsistent.” The proposal says a Republican-led federal government would “give beneficiaries direct control of how they spend Medicare dollars,”

but Lipschutz pointed out that with a Medicare Advantage plan, a private insurer tells beneficiaries what procedures they can or cannot have by deciding which ones they will approve for payment. “That is the opposite of putting beneficiaries in control of how they spend their dollars,” Lipschutz says.

Stories in Stat by Bob Herman and Casey Ross have carefully dissected what patients with Medicare Advantage plans have had to endure to get needed care. As I pointed out in a post about their work, patients often struggle to get the care they need.

In one story about UnitedHealthcare, the largest Medicare Advantage company, the reporters noted that the insurer’s stunning financial success was driven by “brazen behavior,” such as cutting off payments for seriously ill patients and “denying rehabilitation care for older and disabled Americans as profits soared.”

UnitedHealth is far from alone in using such tactics to boost profits. Herman and Ross told of the struggle of a sick, 80-year-old North Carolina woman whose plan with Humana, the second largest Medicare Advantage company, would pay only for cheaper care in a nursing home instead of in a long-term acute-care facility.

The insurance industry’s mighty public relations machine makes it hard for ordinary Americans to understand their options when they turn 65. When a TV pitchman or woman is urging viewers to call right away and sign up for free groceries, the deck is stacked against traditional Medicare and supplemental coverage. 

Meet the insurance industry’s “Better Medicare Alliance”

How many would-be beneficiaries know about the Better Medicare Alliance, an advocacy group promoting Medicare Advantage plans that swings into action at the slightest hint that lawmakers and regulators might curb the lucrative Medicare Advantage program?  The organization’s website offered a sample letter for beneficiaries to send to their Congressional representatives urging them to “protect Medicare Advantage.” 

Sixty-one members of Congress also made their preferences clear in a letter to Chiquita Brooks-LaSure, who heads the Center for Medicare and Medicaid Services, writing, “We are committed to our more than 32 million constituents across the United States who choose Medicare Advantage.” The letter was signed by prominent Democrats including Chuck Schumer, Senate Majority leader from New York; Sen. Amy Klobuchar of Minnesota; and Bob Casey of Pennsylvania, who chairs the Senate aging committee. With such high-powered supporters of Medicare Advantage, it’s easy to see why it’s difficult to put the program on an even playing field with traditional Medicare and supplemental insurance coverage.

Not long ago I received an email from David Marans, an 81-year-old Floridian who wanted to tell me about his experiences with Medicare and the supplemental Medigap insurance he had purchased at age 65. It covers Parts A and B deductibles, excess charges that doctors can impose if their state allows them to collect more than what Medicare has agreed to pay, and emergency room care that he told me “ has saved considerable medical expenses, avoided delays, allayed worries, and allowed peace of mind regarding medical treatment.”  He said he just shows his card at any hospital or doctor’s office, no questions asked, and the “Medigap provider then handles all the rest.”   

The older you get, Marans said, the harder it is to recover from illness; the added stress of finding the means of paying the medical bills and the stresses of Medicare Advantage restrictions and denials can prolong illness. Marans said a Medigap plan alleviates that stress. “In a subtle way, in part, Medigap helps pay for itself.” 

Marans’ advice? “Force yourself to get a Medigap plan on your 65th birthday when you enroll in Medicare, and don’t lose it…

Seniors have to understand car insurance is for what might happen. Health insurance is for what very probably will happen.”

Healthcare Spending 2000-2022: Key Trends, Five Important Questions

Posted on by • Posted in Affordability, Aging Population, Dept of Justice (DOJ), Health Plan, Health Policy, Health System, Healthcare Reform, Healthcare Sector, Inflation Reduction Act, Market Consolidation, Market Trends, Medicare, Medicare Funding, Monopoly Behavior, Operating Margin, Operating Margin Drivers, Out of Pocket Expenses, Underinsured, Uninsured, UnitedHealth Group, UnitedHealthcare • Leave a comment
Healthcare Spending 2000-2022: Key Trends, Five Important Questions

Last week, Congress avoided a partial federal shutdown by passing a stop-gap spending bill and now faces March 8 and March 22 deadlines for authorizations including key healthcare programs.

This week, lawmakers’ political antenna will be directed at Super Tuesday GOP Presidential Primary results which prognosticators predict sets the stage for the Biden-Trump re-match in November. And President Biden will deliver his 3rd State of the Union Address Thursday in which he is certain to tout the economy’s post-pandemic strength and recovery.

The common denominator of these activities in Congress is their short-term focus: a longer-term view about the direction of the country, its priorities and its funding is not on its radar anytime soon. 

The healthcare system, which is nation’s biggest employer and 17.3% of its GDP, suffers from neglect as a result of chronic near-sightedness by its elected officials. A retrospective about its funding should prompt Congress to prepare otherwise.

U.S. Healthcare Spending 2000-2022

Year-over-year changes in U.S. healthcare spending reflect shifting demand for services and their underlying costs, changes in the healthiness of the population and the regulatory framework in which the U.S. health system operates to receive payments. Fluctuations are apparent year-to-year, but a multiyear retrospective on health spending is necessary to a longer-term view of its future.

The period from 2000 to 2022 (the last year for which U.S. spending data is available) spans two economic downturns (2008–2010 and 2020–2021); four presidencies; shifts in the composition of Congress, the Supreme Court, state legislatures and governors’ offices; and the passage of two major healthcare laws (the Medicare Modernization Act of 2003 and the Affordable Care Act of 2010).

During this span of time, there were notable changes in healthcare spending:

  • In 2000, national health expenditures were $1.4 trillion (13.3% of gross domestic product); in 2022, they were $4.5 trillion (17.3% of the GDP)—a 4.1% increase overall, a 321% increase in nominal spending and a 30% increase in the relative percentage of the nation’s GDP devoted to healthcare. No other sector in the economy has increased as much.
  • In the same period, the population increased 17% from 282 million to 333 million, per capita healthcare spending increased 178% from $4,845 to $13,493 due primarily to inflation-impacted higher unit costs for , facilities, technologies and specialty provider costs and increased utilization by consumers due to escalating chronic diseases.
  • There were notable changes where dollars were spent: Hospitals remained relatively unchanged (from $415 billion/30.4% of total spending to $1.355 trillion/31.4%), physician services shrank (from $288.2 billion/21.1% to $884.8/19.6%) and prescription drugs were unchanged (from $122.3 billion/8.95% to $405.9 billion/9.0%).
  • And significant changes in funding Out-of-pocket shrank from 14.2% ($193.6 billion in 2020) to (10.5% ($471 billion) in 2020, private insurance shrank from $441 billion/32.3% to $1.289 trillion/29%, Medicare spending grew from $224.8 billion/16.5% to $944.3billion/21%; Medicaid and the Children’s Health Insurance Program spending grew from $203.4 billion/14.9% to $7805.7billion/18%; and Department of Veterans Affairs healthcare spending grew from $19.1 billion/1.4% to $98 billion/2.2%.

Looking ahead (2022-2031), CMS forecasts average National Health Expenditures (NHE) will grow at 5.4% per year outpacing average GDP growth (4.6%) and resulting in an increase in the health spending share of Gross Domestic Product (GDP) from 17.3% in 2021 to 19.6% in 2031.

The agency’s actuaries assume

“The insured share of the population is projected to reach a historic high of 92.3% in 2022… Medicaid enrollment will decline from its 2022 peak of 90.4M to 81.1M by 2025 as states disenroll beneficiaries no longer eligible for coverage. By 2031, the insured share of the population is projected to be 90.5 percent. The Inflation Reduction Act (IRA) is projected to result in lower out-of-pocket spending on prescription drugs for 2024 and beyond as Medicare beneficiaries incur savings associated with several provisions from the legislation including the $2,000 annual out-of-pocket spending cap and lower gross prices resulting from negotiations with manufacturers.”

My take:

The reality is this: no one knows for sure what the U.S. health economy will be in 2025 much less 2035 and beyond. There are too many moving parts, too much invested capital seeking near-term profits, too many compensation packages tied to near-term profits, too many unknowns like the impact of artificial intelligence and court decisions about consolidation and too much political risk for state and federal politicians to change anything.

One trend stands out in the data from 2000-2022: The healthcare economy is increasingly dependent on indirect funding by taxpayers and less dependent on direct payments by users. 

In the last 22 years, local, state and federal government programs like Medicare, Medicaid and others have become the major sources of funding to the system while direct payments by consumers and employers, vis-à-vis premium out-of-pocket costs, increased nominally but not at the same rate as government programs. And total spending has increased more than the overall economy (GDP), household wages and  costs of living almost every year.

Thus, given the trends, five questions must be addressed in the context of the system’s long-term solvency and effectiveness looking to 2031 and beyond:

  • Should its total spending and public funding be capped?
  • Should the allocation of funds be better adapted to innovations in technology and clinical evidence?
  • Should the financing and delivery of health services be integrated to enhance the effectiveness and efficiency of the system?
  • Should its structure be a dual public-private system akin to public-private designations in education?
  • Should consumers play a more direct role in its oversight and funding?

Answers will not be forthcoming in Campaign 2024 despite the growing significance of healthcare in the minds of voters. But they require attention now despite political neglect.

PS: The month of February might be remembered as the month two stalwarts in the industry faced troubles:

United HealthGroup, the biggest health insurer, saw fallout from a cyberattack against its recently acquired (2/22) insurance transaction processor by ALPHV/Blackcat, creating havoc for the 6000 hospitals, 1 million physicians, and 39,000 pharmacies seeking payments and/or authorizations. Then, news circulated about the DOJ’s investigation about its anti-competitive behavior with respect to the 90,000 physicians it employs. Its stock price ended the week at 489.53, down from 507.14 February 1.

And HCA, the biggest hospital operator, faced continued fallout from lawsuits for its handling of Mission Health (Asheville) where last Tuesday, a North Carolina federal court refused to dismiss a lawsuit accusing it of scheming to restrict competition and artificially drive-up costs for health plans. closed at 311.59 last week, down from 314.66 February 1.

What a Biden-Trump Re-Match means for Healthcare Politics: How the Campaigns will Position their Differences to Voters

Posted on by • Posted in 2024 Election Issues, ACA, Access & Quality of Healthcare, Access to IVF Treatments, Affordability, Antitrust, Competition, Federal Trade Commission, Federal Trade Commission (FTC), Health Insurance Coverage Adequacy, Health Policy, High Drug Prices, Market Consolidation, Market Power, Medicaid, Medicare, Monopoly Behavior, Out of Pocket Expenses, Price Transparency, Public Health • Leave a comment
What a Biden-Trump Re-Match means for Healthcare Politics: How the Campaigns will Position their Differences to Voters

With the South Carolina Republican primary results in over the weekend, it seems a Biden-Trump re-match is inevitable. Given the legacies associated with Presidencies of the two and the healthcare platforms espoused by their political parties, the landscape for healthcare politics seems clear:

Healthcare IssueBiden PolicyTrump Policy
Access to Abortion‘It’s a basic right for women protected by the Federal Government’‘It’s up to the states and should be safe and rare. A 16-week ban should be the national standard.’
Ageism‘President Biden is alert and capable. It’s a non-issue.’‘President Biden is senile and unlikely to finish a second term is elected. President Trump is active and prepared.’
Access to IVF Treatments‘It’s a basic right and should be universally accessible in every state and protected’‘It’s a complex issue that should be considered in every state.’
Affordability‘The system is unaffordable because it’s dominated by profit-focused corporations. It needs increased regulation including price controls.’‘The system is unaffordable to some because it’s overly regulated and lacks competition and price transparency.’
Access to Health Insurance Coverage‘It’s necessary for access to needed services & should be universally accessible and affordable.’‘It’s a personal choice. Government should play a limited role.’
Public health‘Underfunded and increasingly important.’‘Fragmented and suboptimal. States should take the lead.’
Drug prices‘Drug companies take advantage of the system to keep prices high. Price controls are necessary to lower costs.’‘Drug prices are too high. Allowing importation and increased price transparency are keys to reducing costs.’
Medicare‘It’s foundational to seniors’ wellbeing & should be protected. But demand is growing requiring modernization (aka the value agenda) and additional revenues (taxes + appropriations).’‘It’s foundational to senior health & in need of modernization thru privatization. Waste and fraud are problematic to its future.’
Medicaid‘Medicaid Managed Care is its future with increased enrollment and standardization of eligibility & benefits across states.’‘Medicaid is a state program allowing modernization & innovation. The federal role should be subordinate to the states.’
Competition‘The federal government (FTC, DOJ) should enhance protections against vertical and horizontal consolidation that reduce choices and increase prices in every sector of healthcare.’‘Current anti-trust and consumer protections are adequate to address consolidation in healthcare.’
Price Transparency‘Necessary and essential to protect consumers. Needs expansion.’‘Necessary to drive competition in markets. Needs more attention.’
The Affordable Care Act‘A necessary foundation for health system modernization that appropriately balances public and private responsibilities. Fix and Repair’‘An unnecessary government takeover of the health system that’s harmful and wasteful. Repeal and Replace.’
Role of federal government‘The federal government should enable equitable access and affordability. The private sector is focused more on profit than the public good.’‘Market forces will drive better value. States should play a bigger role’

My take:

Polls indicate Campaign 2024 will be decided based on economic conditions in the fall 2024 as voters zero in on their choice. Per KFF’s latest poll, 74% of adults say an unexpected healthcare bill is their number-one financial concern—above their fears about food, energy and housing. So, if you’re handicapping healthcare in Campaign 2024, bet on its emergence as an economic issue, especially in the swing states (Michigan, Florida, North Carolina, Georgia and Arizona) where there are sharp health policy differences and the healthcare systems in these states are dominated by consolidated hospitals and national insurers.

  • Three issues will be the primary focus of both campaigns: women’s health and access to abortion, affordability and competition. On women’s health, there are sharp differences; on affordability and competition, the distinctions between the campaigns will be less clear to voters. Both will opine support for policy changes without offering details on what, when and how.
  • The Affordable Care Act will surface in rhetoric contrasting a ‘government run system’ to a ‘market driven system.’ In reality, both campaigns will favor changes to the ACA rather than repeal.
  • Both campaigns will voice support for state leadership in resolving abortion, drug pricing and consolidation. State cost containment laws and actions taken by state attorneys general to limit hospital consolidation and private equity ownership will get support from both campaigns.
  • Neither campaign will propose transformative policy changes: they’re too risky. integrating health & social services, capping total spending, reforms of drug patient laws, restricting tax exemptions for ‘not for profit’ hospitals, federalizing Medicaid, and others will not be on the table. There’s safety in promoting populist themes (price transparency, competition) and steering away from anything more.

As the primary season wears on (in Michigan tomorrow and 23 others on/before March 5), how the health system is positioned in the court of public opinion will come into focus.

Abortion rights will garner votes; affordability, price transparency, Medicare solvency and system consolidation will emerge as wedge issues alongside.

PS: Re: federal budgeting for key healthcare agencies, two deadlines are eminent: March 1 for funding for the FDA and the VA and March 8 for HHS funding.

The genetic paradox: Yesterday’s solutions are today’s problems. Can U.S. healthcare shift gear faster than our genes?

Posted on by • Posted in Capitation, Fee for Service Reimbursement, Gene Mutation, Gene Therapy, Genetics, Medical Group, Physician, Value-Based Healthcare • Leave a comment

https://www.linkedin.com/pulse/genetic-paradox-yesterdays-solutions-todays-problems-can-pearl-m-d–r6mic/?trackingId=C3X2nlWPRe6yBwiHCcuWGg%3D%3D

In a world where change is the only constant, the swift currents of modern life contrast starkly with the sluggish pace of genetic evolution—and of American healthcare, too.

Two relatively recent scientific discoveries demonstrate how the very genetic traits that once secured humanity’s survival are failing to keep up with the times, producing dire medical consequences. These important biological events offer insights into American medicine—along with a warning about what can happen when healthcare systems fail to change.

The Mysteries Of Sickle Cell And Multiple Sclerosis

For decades, scientists were baffled by what seemed like an evolutionary contradiction.

Sickle cell disease is a condition resulting from a genetic mutation that produces malformed red blood cells. It afflicts approximately 1 in 365 Black Americans, causing severe pain and organ failure.

Its horrific impact on people raises a question: How has this genetic mutation persisted for 7,300 years? Nature is a merciless editor of life, and so you would expect that across seven millennia, people with this inherited problem would be less likely to survive and reproduce. This curiosity seems to defy the teachings of Charles Darwin, who theorized that evolution discards what no longer serves the survival of a species.

Scientists solved this genetic puzzle in 2011, illuminating a significant evolutionary trade-off.

People living with sickle cell disease have two abnormal genes, one inherited from each parent. While the disease, itself, affects a large population (roughly 100,000 African Americans), it turns out that a far larger population in the United States carries one “abnormal” gene and one normal gene (comprising as many as 3 million Americans).

This so called “sickle cell trait” presents milder symptoms or none at all when compared to the full disease. And, unlike those with the disease, individuals who with one (but not both) abnormal genes possess a distinct evolutionary advantage: They have a resistance to severe malaria, which every year claims more than 600,000 lives around the globe.

This genetic adaptation (a resistance to malaria) kept people alive for many millennia in equatorial Africa, protecting them from the continent’s deadliest infectious disease. But in present-day America, malaria is not a major public-health concern due to several factors, including the widespread use of window screens and air conditioning, controlled and limited habitats for the Anopheles mosquitoes (which transmit the disease), and a strong healthcare system capable of managing and containing outbreaks. Therefore, the sickle cell trait is of little value in the United States while sickle cell disease is a life-threatening problem.

The lesson: Genetic changes beneficial in one environment, such as malaria-prone areas, can become harmful in another. This lesson isn’t limited to sickle cell disease.

A similar genetic phenomenon was uncovered through research that was published last month in Nature. This time, scientists discovered an ancient genetic mutation that is, today, linked to multiple sclerosis (MS).

Their research began with data showing that people living in Northern Europe have twice the number of cases of MS per 100,000 individuals as people in the South of Europe. Like sickle cell disease, MS is a terrible affliction—with immune cells attacking neurons in the brain, interfering with both walking and talking.

Having identified this two-fold variance in the prevalence of MS, scientists compared the genetic make-up of the people in Europe with MS versus those without this devastating problem. And they discovered a correlation between a specific mutated gene and the risk of developing MS. Using archeological material, the researchers then connected the introduction of this gene into Northern Europe with cattle, goat and sheep herders from Russia who migrated west as far back as 5,000 years ago.

Suddenly, the explanation comes into focus. Thousands of years ago, this genetic abnormality helped protect herders from livestock disease, which at the time was the greatest threat to their survival. However, in the modern era, this same mutation results in an overactive immune response, leading to the development of MS.

Once again, a trait that was positive in a specific environmental and historical context has become harmful in today’s world.

Evolving Healthcare: Lessons From Our Genes

Just as genetic traits can shift from beneficial to detrimental with changing circumstances, healthcare practices that were once lifesaving can become problematic as medical capabilities advance and societal needs evolve.

Fee-for-service (FFS) payments, the most prevalent reimbursement model in American healthcare, offer an example. Under FFS, insurance providers, the government or patients themselves pay doctors and hospitals for each individual service they provide, such as consultations, tests, and treatments—regardless of the value these services may or may not add.

In the 1930s, this “mutation” emerged as a solution to the Great Depression. Organizations like Blue Cross began providing health insurance, ensuring healthcare affordability for struggling Americans in need of hospitalization while guaranteeing appropriate compensation for medical providers.

FFS, which linked payments to the quantity of care delivered, proved beneficial when the problems physicians treated were acute, one-time issues (e.g., appendicitis, trauma, pneumonia) and relatively inexpensive to resolve.

Today, the widespread prevalence of chronic diseases in 6 out of 10 Americans underlines the limitations of the fee-for-service (FFS) model. In contrast to “pay for value” models, FFS, with its “pay for volume” approach, fails to prioritize preventive services, the avoidance of chronic disease complications, or the elimination of redundant treatments through coordinated, team-based care. This leads to increased healthcare costs without corresponding improvements in quality.

This situation is reminiscent of the evolutionary narrative surrounding genetic mutations like sickle cell disease and MS. These mutations, which provided protective benefits in the past, have become detrimental in the present. Similarly, healthcare systems must adapt to the evolving medical and societal landscape to better meet current needs.

Research demonstrates that it takes 17 years on average for a proven innovation in healthcare to become common practice. When it comes to evolution of healthcare delivery and financing, the pace of change is even more glacial.

In 1934, the Committee on the Cost of Medical Care (CCMC) concluded that better clinical outcomes would be achieved if doctors (a) worked in groups rather than as fragmented solo practices and (b) were paid based on the value they provided, rather than just the volume of work they did.

Nearly a century later, these improvements remain elusive. Well-led medical groups remain the minority of all practices while fee-for-service is still the dominant healthcare reimbursed method.

Things progress slowly in the biological sphere because chance is what initiates change. It takes a long time for evolution to catch up to new environments.

But change in healthcare doesn’t have to be random or painfully slow. Humans have a unique ability to anticipate challenges and proactively implement solutions. Healthcare, unlike biology, can advance rapidly in response to new medical knowledge and societal needs. We have the opportunity to leverage our knowledge, technology, and collaborative skills to address and adapt to change much faster than random genetic mutations. But it isn’t happening.

Standing in the way is a combination of fear (of the risks involved), culture (the norms doctors learn in training) and lack of leadership (the ability to translate vision into action).

Genetics teaches us that evolution ultimately triumphs. Mutations that save lives and improve health become dominant in nature over time. And when those adaptations no longer serve a useful purpose, they’re replaced.

I hope the leaders of American medicine will learn to adapt, embracing the power of collaborative medicine while replacing fee-for-service payments with capitation (a single annual payment to group of clinicians to provide the medical care for a population of patients.) If they wait too long, dinosaurs will provide them with the next set of biological lessons.