American healthcare wasn’t always as efficient and effective as the market-based system we have in 2037.
“A new set of exchange-traded funds (ETFs) allows investors to funnel dollars into specific disease categories. … The new family of funds, called HealthShares … is the latest twist in the red-hot world of ETFs, which are similar to index funds but can be traded like stocks.”
Business Week, November 2006
Looking back now at the mostly unsuccessful single term of former President John McCain, it’s easy to see why he was the first president since Chester Arthur to be rejected by his own party for renomination. He had long annoyed Republicans’ right-wing base, after all, and four years of his vaunted “straight talk” was quite enough for just about everyone on both sides of the aisle.
But historians now credit his administration with one lasting achievement: He established the plan that reinvigorated American healthcare and perhaps salvaged private-practice medicine.
America was a much different place 30 years ago. Driving a gasoline-powered car was still legal (and quite common); global warming was being derided in some quarters as a myth; teleportation had not yet been invented; Baghdad had not yet become a gleaming, tourist-friendly metropolis; and Venice, Italy, was still partially above water.
The changes in healthcare have been even more dramatic.
The average life expectancy in 2007 was 77, not today’s 97. Physicians still regularly implanted stents in patients’ hearts. No one had heard of transgenerative care or autoneurotops. Health insurance was most often provided as an employment benefit, and in 2007 more than 47 million Americans went without it.
Few physicians were paid directly by patients. Many were leaving the practice of medicine due to Byzantine government regulations, restrictions imposed by “managed care” companies, an arcane medical malpractice system, and declining payments for services. While most large medical practices had fully operational electronic health records (then more commonly referred to as electronic medical records), many smaller practices did not.
It wasn’t until the fiscal crisis of 2010, when America’s foreign creditors began refusing to fund further expansion of our national debt, that a new path for healthcare appeared. When the Federal Reserve lacked sufficient dollars to buoy the markets, McCain tried a desperate measure. He ordered the Securities and Exchange Commission to permit the creation of Personal Healthcare Exchange Trade Funds (PHETFs), based on the increasingly popular index fund market.
Encouraged by an aggressive federal tax incentive, many Americans followed McCain’s lead, dropping out of the traditional healthcare insurance market and instead directing their largest annual healthcare expenditure into a PHETF.
Critics, like Sen. Hillary Rodham Clinton (D-N.Y.), said that allowing consumers to buy and sell an index based on their family’s health “would embarrass even the most aggressive capitalist.”
But it worked. Last year, when President Jenna Bush celebrated the 25th anniversary of the PHETF market at the White House, she noted that more than 75 percent of U.S. households are covered by a PHETF, with millions of Americans tracking their family healthcare metrics on the same infobot as their stock portfolios.
“The marriage of private markets with personal health revolutionized healthcare in America,” explains Professor Ameesh Lexington-Stein, the GE-Google professor of health economics at Beijing University.
PHETFs also revolutionized private practice, providing a strong economic boost to physicians with better patient outcomes. Although PHETFs are not a panacea, physicians who participate in the PHETF market have greater autonomy to direct patient care, subject only to a patient’s willingness to affect their PHETF rating. PHETFs also offered the government new resources to fund a portion of indigent healthcare.
“It took courage and vision to get us where we are today,” says Professor Lexington-Stein. “Luckily, physicians back in 2007 didn’t give up.”
This article originally appeared in the January 2007 issue of Physicians Practice.