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 is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See https://www.noworldborders.com/news/ and https://www.noworldborders.com/clients/ for more about the company.

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