Will Healthcare Go the Way of Farming in the U.S.?

American agriculture transformed in the 20th century from labor intensive  to highly mechanized in the 21st century.  One hundred years ago, farming took place in many small rural farms near more than half the U.S. population lived.  Farms employed 41% of the U.S. workforce in 1900, and 21% in 1930 in the U.S.A.
Old Farming

Today, efficient  farms  employ under 2% of U.S. workers.  One hundred years ago, approximately 22 million work animals were used and today  5 million tractors have replaced horses and mules of earlier days.  The agricultural sector of the 21st century, on the other hand, is concentrated on a small number of large, specialized farms in rural areas where less than a fourth of the U.S. population lives.

One debate about U.S. farm programs holds that current policies were designed for a period in American agriculture that does not exist today.  The farms,  farm based families, and the communities that depend on agricultural income changed  over the last century.  So, it follows that the efficacy of policies with roots in an agricultural  economy should be re-examined.

Similarly, the debate about U.S. healthcare focuses to some extent on differences in the U.S. population today vs. when many of the policies that shape the healthcare economy were first enacted.

In both industries, incentives were developed to make it less attractive for small providers and more attractive for highly efficient, automated providers with scale. The industrial revolution introduced an era of specialization that is pervasive in economic, financial, and management thinking today.  The difference in healthcare, vs. manufacturing or farming is that higher productivity while maintaining or increasing quality has not been achieved.

In agriculture, technological development and market integration created change.   U.S. farm programs changed in the last 40 years along with the evolution of new economic and political circumstances.  (Source: http://www.ers.usda.gov/media/259572/eib3_1_.pdf) But a focus on income support has remained constant.   We can assume that based on recent U.S. policy certain incentives and regulations will continue in healthcare and that the general effect will be to encourage scale and specialization.  The main difference between healthcare and agriculture is that interoperability is essential for the former and will create cooperatives focused on data sharing just as in agriculture smaller providers have historically joined forces to achieve economies of scale and reduce redundant processes.

Since “quality” in healthcare correlates directly to “outcomes” and patient health, one of the biggest determinants of whether healthcare efficiency can be increased while increasing quality will be interoperability.  U.S. healthcare policy has focused on interoperability with electronic health records, Health Information Exchanges (HIEs) and other initiatives.   The realization of a return on these investments is likely to take decades, just as it did in Agriculture.

Meanwhile, daunting and disruptive regulations are making it more difficult for small health care providers to remain independent.

Michael F. Arrigo

Michael Arrigo brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health IT, and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations who provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and medical billing, fraud damages, as well as electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, medical malpractice, insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software SA (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls IT audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and is published in Healthcare IT News.

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