Let’s first review a few of the key features/bugs of the American healthcare system.
The principal-agent problem in healthcare refers to the challenges that arise when the interests of the principal (the patient) and the agent (the healthcare provider, such as a doctor) do not align perfectly. Ideally, healthcare providers would make decisions solely based on the best interests of their patients. However, because patients are not the end customer (health plans are), healthcare providers have their own motives, preferences, or financial incentives that could conflict with the patient's best interests.
A significant portion of Americans receive health insurance through their employers, a practice that originated during World War II when wage controls led companies to offer benefits as a way to attract workers. Employer-sponsored insurance is a cornerstone of the U.S. healthcare system, but it can lead to coverage gaps when people lose or change jobs, and it can limit individuals' choice of providers and plans.
This variability also disincentivizes health plans’ desire for long-term, positive outcomes from patients. Similarly, we pay for medical care rather than health optimization, so we get treatment rather than health.
The predominant payment model in the U.S. healthcare system is fee-for-service (FFS), which pays providers based on the volume and complexity of services rendered rather than the quality or outcomes of care. This model can encourage overtreatment, as providers have a financial incentive to perform more tests, procedures, and interventions. The fee-for-service model can contribute to high healthcare costs, fragmented care, and the overuse of healthcare resources.
What if providers got paid based on the quality of their care? This is called value-based care (VBC). Paying for quality or outcomes in theory is absolutely preferable to paying for volume, but it’s proven to be much harder than it seems. We can and should make much more progress — it’s probably the single most important change to make — but there are practical, financial, and cultural obstacles. It’s noteworthy that many providers now are paid partly on volume and partly on value, which dilutes the incentive impact.
Significant health disparities exist within the U.S. healthcare system based on factors like race, ethnicity, socioeconomic status, and geographic location. These disparities result in unequal access to care and varying health outcomes, with marginalized communities often facing greater health challenges. The complex interplay of social determinants of health, systemic barriers, and historical inequities contribute to these disparities, necessitating targeted interventions and policies to address them.
The U.S. healthcare system is regulated at multiple levels, with federal, state, and local governments each having their own roles and responsibilities. This decentralized approach can lead to a complex and sometimes inconsistent regulatory environment, making it challenging to implement cohesive policies and standards across the nation.
<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/3834b507-f79f-4788-a6be-4711711e6e3a/1610736303668.jpeg" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/3834b507-f79f-4788-a6be-4711711e6e3a/1610736303668.jpeg" width="40px" /> **Levels** - Sam Corcos, CEO & Founder
“The healthcare industry is incentivized to treat symptoms and diseases in a maladaptive cycle. But it’s clear that we’re in a metabolic health crisis. The scale and nature of the metabolic epidemic requires a new strategy: making real-time health information available to individuals to support prevention rather than reaction.
At Levels, we focus on wellness by enabling members to see their real-time continuous glucose data alongside their food and exercise logs. This helps them to make better choices informed by their own personal data. With real-time feedback, our members learn that diet and lifestyle changes have an impact on overall health now and in the future.”
<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/692eb43c-db74-4dc4-851e-398b598218eb/1638278321226.jpeg" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/692eb43c-db74-4dc4-851e-398b598218eb/1638278321226.jpeg" width="40px" /> The Othership - Robbie Bent, CEO & Founder
“When it comes to healthcare, our system often overlooks the impact of preventative healthcare. The most overlooked form of preventative healthcare? Wellness + mindfulness practices. Wellness is preventative healthcare which is cornerstone of health for all humans.
Traditional providers that work with payers are not incentivized to provide preventative care for patients because many contracts with payers are fee for service which means that the more people visit the hospital the more they get paid.
Mindfulness & wellness practices like Breathwork allow payers to navigate misaligned incentives and still provide high-quality, effective, preventative care.”
<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/571b5043-5400-4e8e-8d71-11d3c19900b5/h70Jdghp_400x400.jpg" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/571b5043-5400-4e8e-8d71-11d3c19900b5/h70Jdghp_400x400.jpg" width="40px" /> Cityblock Health - Toyin Ajayi, Co-Founder & CEO
<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/10bf7cf5-44aa-42b8-b452-0f5b52533b2f/alleycorp-squarelogo-1620720278714.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/10bf7cf5-44aa-42b8-b452-0f5b52533b2f/alleycorp-squarelogo-1620720278714.png" width="40px" /> AlleyCorp - Kevin Ryan, Founder & CEO