The Healthrocks

Warren Buffet shared a parable about a family called the Gotrocks who own a lot of wealth to start and as “smart” consultants come, they realize somehow their wealth decreases as complexity increases. As I read this parable, I couldn’t help but think about how our healthcare system got built exactly like how the Gotrocks got screwed in the parable. With the help of AI, here is the Gotrocks parable rewritten to reflect our healthcare system. Complexity begets complexity. DPC has been interesting to so many people because it essentially resets everything and brings care back to just the doctor and patient. 

THE HEALTHROCKS

Imagine every American belongs to one enormous family called the Healthrocks.

Collectively, the Healthrocks pay for all the healthcare delivered in America. They pay for the doctors, nurses, hospitals, pharmacies, laboratories, and clinics.

When Grandma Healthrock gets pneumonia, a doctor treats her.

When Little Timmy Healthrock breaks his arm, somebody fixes it.

When Uncle Bob needs his cholesterol checked, somebody draws his blood.

At first, the arrangement is remarkably simple:

Sick people need healthcare.

Healthcare workers provide healthcare.

The Healthrocks pay them.

Then one day a very smart man arrives.

“You can’t just pay doctors,” he explains.

“Why not?”

“Healthcare is much too complicated for that.”

The Healthrocks hadn’t realized this.

Fortunately, the man has a solution.

He will collect everybody’s money, decide which doctors they may see, determine which services will be paid for, and then pay the doctors on the family’s behalf.

For a fee, of course.

The Healthrocks agree.

Soon the doctors discover that getting paid has become surprisingly difficult.

Another smart person arrives.

“I can help you get paid.”

Excellent.

The doctors hire billing specialists.

The billing specialists quickly discover that bills must contain exactly the right numbers in exactly the right boxes.

Fortunately, another group of experts appears.

“We specialize in coding.”

The doctors hire them too.

The insurance company becomes concerned that some of these codes might result in unnecessary spending.

So it hires people to review the codes.

The doctors respond by hiring people to explain the codes to the people reviewing the codes.

Healthcare spending continues to rise.

A consultant arrives.

“I have identified the problem,” she announces.

“Too many unnecessary services.”

The Healthrocks are relieved.

“What should we do?”

“Require prior authorization.”

Now, before performing certain treatments, doctors must ask permission.

This requires people at the doctor’s office to request permission.

People at the insurance company review the request.

Sometimes they deny it.

So the doctor hires people to appeal the denial.

The insurance company hires people to review the appeal.

Occasionally those people disagree.

Fortunately, there are people available to conduct peer-to-peer reviews.

Healthcare spending continues to rise.

Another consultant arrives.

“I have identified the problem.”

The Healthrocks lean forward.

“Doctors aren’t sufficiently incentivized to provide quality.”

This sounds serious.

“How do we know if they’re providing quality?”

“We measure it.”

So the family hires people to create quality measures.

Doctors hire people to document the quality measures.

Hospitals hire people to report the quality measures.

Insurance companies hire people to verify the quality measures.

The government hires contractors to audit the quality measures.

Then everyone hires software companies to make dashboards displaying the quality measures.

Healthcare spending continues to rise.

Another consultant arrives.

“I have identified the problem.”

The Healthrocks are getting tired, but they listen.

“Healthcare is fragmented.”

“What should we do?”

“Care coordination.”

Excellent.

They hire care coordinators.

The care coordinators coordinate with utilization managers, case managers, benefit managers, network managers, pharmacy benefit managers, population health managers, and revenue-cycle managers.

Eventually someone suggests hiring a manager to manage all the managers.

This is considered a major innovation.

Healthcare spending continues to rise.

Now the Healthrocks become genuinely worried.

Their healthcare system is extraordinarily expensive.

Fortunately, a distinguished group of healthcare-cost experts arrives.

They have impressive PowerPoints.

“We specialize in reducing administrative waste.”

Wonderful.

“How?”

“First, we’ll need to study it.”

They hire analysts.

The analysts request data from the administrators.

The administrators hire people to produce the data.

The analysts discover the data aren’t standardized.

A standards organization is formed.

Then a certification organization certifies compliance with the standards.

Then consultants help organizations prepare for certification.

Healthcare spending continues to rise.

Eventually, a child at the Healthrock family reunion asks an impolite question.

“How many of these people actually take care of sick people?”

There is an uncomfortable silence.

Because, after decades of trying to control the cost of healthcare, the Healthrocks have constructed a magnificent machine.

A patient asks a doctor for care.

The doctor asks an insurer for permission.

The insurer asks for documentation.

The doctor asks an employee to produce the documentation.

The insurer asks another employee to review the documentation.

A vendor provides the software that transmits the documentation.

A consultant measures how quickly the documentation was processed.

An auditor checks whether the consultant measured it correctly.

And everybody sends the Healthrocks a bill.

The remarkable thing is that almost everyone in this system can plausibly explain why their job is necessary.

And they may be right.

Once you’ve built the system, somebody really does need to process the prior authorization.

Somebody really does need to appeal the denial.

Somebody really does need to reconcile the claim.

Somebody really does need to audit the coder.

The brilliance of the machine is that every layer creates the justification for the next layer.

The Healthrocks started with a problem:

Healthcare is expensive.

They attempted to solve it by hiring people to control healthcare spending.

Then they hired people to deal with the people controlling healthcare spending.

Then they hired people to measure the people dealing with the people controlling healthcare spending.

And eventually they discovered something extraordinary:

They had created one of the world’s largest industries devoted to making sure that people who provide healthcare do not accidentally provide healthcare without first interacting with the industry.

Grandma Healthrock still has pneumonia.

Little Timmy’s arm is still broken.

Someone still needs to take care of them.

Only now there is an entire economy standing in the hallway.