A New ‘True North’ – An Economist’s Perspective on Healthcare Costs and Spending

For anyone who doesn’t appreciate the critical importance of healthcare economics in the U.S., consider this: The average price for health insurance in the U.S. for a family of four is $18,500 per year. This is the equivalent of each American family purchasing a car every year.  Healthcare currently makes up nearly 20% of the U.S. GDP; and numerous studies have suggested that nearly one-third of that spend is unnecessary, wasteful and even harmful.  Given the unfettered rise in healthcare spending, it’s been estimated that Millennials will conservatively spend somewhere between 50 to 75% of their total lifetime earnings paying for healthcare.  

These staggering statistics give you a sense of the important role that healthcare economists can play in determining the future of our healthcare system, and the future of our economy. Healthcare economists take an objective, data-driven approach to analyzing the issues of healthcare spending and utilization.  We’ll discover, in this fascinating interview with a leading healthcare economist, that many beliefs we hold about healthcare spending are based on incomplete data, and therefore erroneous conclusions.

Dr. Zack Cooper – our guest on this episode of Creating a New Healthcare, trained at the London School of Economics and is an Associate Professor of Health and of Economics at Yale University. He is one of the rising stars on the healthcare economics scene; and represents the nextgen – trained in the most advanced science, analytics & machine learning that can be applied to healthcare spending, utilization & costs. His publications are regularly featured in the New York Times which wrote of Dr. Cooper’s work that it’s “likely to force a rethinking of some conventional wisdom about healthcare”.  

In this interview, we’ll cover a broad range of topics including:

  • What healthcare economists actually do & how they influence policies around healthcare delivery & payment.
  • How Dr. Cooper’s ground-breaking research on commercial health insurance completely changes our understanding about regional healthcare utilization & costs.  
  • Dr. Cooper’s recent research that challenges our belief that patients can act as informed consumers capable of making price-based decisions, even when they’re provided with straightforward, transparent, comparative pricing.
  • Evidence-based recommendations for redesigning employee health plans.

I came away from this from this interview with a newfound and enhanced respect for the role that healthcare economists play in creating a new healthcare. We need their powerful problem-solving methods & advanced analytics to help us decide which problems to solve and how to go about solving them.  It’s hard to argue against the notion that healthcare needs a new ‘True North’.  Perhaps we should take a closer look at the compass that Professor Cooper and his colleagues are constructing.