A New Year’s Resolution for American Healthcare: Follow the Evidence to Better Health at Lower Cost
Lesson 16: Healthcare for Policymakers
It is the season for resolutions, and there is no more important resolution for us as a country than reforming our healthcare system. Americans are so upset with institutions that do not serve them that they voted to “shake things up” in the last election. I absolutely agree with them. Our medical institution does not serve us, and it needs shaking up. Our institutions desperately need shaking up, but the way we shake them up is critical. Shaking things up for the sake of shaking things up will never work. It is easy to burn the house down. Replacing it with a better house is the most challenging part and it is very easy to make the cure worse than the disease.
One of the great wits of my lifetime was the British Prime Minister Winston Churchill. He famously said, “You can always count on Americans to do the right thing — after they’ve tried everything else,” and that is true in medicine. We have been trying everything else for decades and those efforts have not worked. I worry that I can not help you understand how bad our healthcare system is and how poorly it serves you. The best medical minds in our country said it this way over two decades ago: “Between the health care we have and the care we could have lies not just a gap, but a chasm.” Our healthcare system is still twice as expensive as those of other developed countries and critical outcomes like maternal and infant mortality are much worse. We spend 20% of gross domestic product (GDP) on healthcare. Singapore spends 5% of GDP on health care and their citizens live longer. Our level of spending is getting worse fast. Spending grew by 7.5% last year. That is unsustainable.
The American National Academy of Medicine provided a roadmap for change two decades ago that our health leaders have ignored. Singapore has followed the roadmap and that is one of the main reasons they live longer at one fourth of the cost. The Singapore story offers some powerful clues for us. Singapore is renowned for its reliance on best practices and effective quality improvement programs in all institutions including healthcare. They have one stop primary care centers called polyclinics that contain teams focused on chronic disease. The Enhanced Family Physician Clinic also known as The Diabetes, Hypertension and Lipid or DHL Clinic contains specific infrastructure built for chronic disease management programs including well-equipped consultation rooms for individual health counseling and education, smoking cessation counseling, a fundus camera for diabetic retinal photography, diet counseling, foot check; each manned by a trained nurse. Spacious air-conditioned waiting areas with educational video presentations and printed materials readily available for patients to consume. Notice that the entire structure of the Enhanced Family Physician Clinic is designed to make certain that every patient receives every critical intervention every time. Our system depends on the primary care physician to make sure that patients receive these tests and interventions. In Singapore’s DHL clinic these is a nurse whose only job is making sure each patient gets a diabetic eye check. That approach assures more reliability.
Not all patients with chronic diseases are seen in these clinics. Patients are stratified and those with sub optimal control who fulfill criteria are given appointments to follow-up in these chronic care clinics like diabetic patients with HbA1c of 8% or more, and complicated patients with two or more chronic conditions. Once their conditions are stabilized, patients have an option to return to their previous primary care doctors. They have learned better self-management, and they can be monitored to be sure they stay on track. This is exactly the way my team worked in East Tennessee. We saw patients with risk factors that we not controlled, had complications already, or had multiple high-risk conditions.
Multi-disciplinary teams are central to the Singapore Enhanced Family Physician Clinic. The framework in the development of the disease management program included identifying the priority diseases and defining the target population, organizing a multi-disciplinary team led by a clinician champion, defining the core components, treatment protocols and evaluation methods, defining the goals, and measuring and managing the outcomes. Primary healthcare centers, or polyclinics, are run by teams of family physicians, medical officers, nurses, case managers, health educators, dieticians, pharmacists, clinical administrators and medical social workers. The establishment of the clusters has provided a setting in which structured disease management could be readily implemented. That describes our comprehensive model for chronic condition management reform precisely.
“All the current 18 government polyclinics have structured disease management programs that are team-based and led by family physicians (known as clinician champions). The functional integration of these healthcare elements within each cluster under a common administrative and professional management, and the development of common clinical information systems greatly facilitate implementation of disease management programs. Multi-disciplinary support protocols have been developed in conjunction with hospital specialists to provide consistent integrated pathway and to facilitate the referral systems. Case managers have been recruited and trained in developing clinical pathways and performing discharge planning for inpatients and utilization review for outpatient care in the hospitals. Clinical case managers in primary care, recently introduced into polyclinics, work closely with patients on the lifestyle and medication changes required to achieve target, is a prominent feature of most successful chronic disease programs. The case manager is usually a nurse or nurse practitioner with additional training or experience in a particular chronic disease care and in techniques to help patients become more capable self-managers of their illness. The nurses personally “manage” patients by protocol, adding clinical and self-management skills as well as greater intensity of care.”
It is really simple. The National Academy of Medicine produced a roadmap for change. They produced a roadmap to finally Cross the Quality Chasm. Singapore has proved that roadmap works at a national level. The path forward is crystal clear. We will have better health at much lower cost when we do what Singapore has done. I have been working with dozens of people across the country to support organizations in replicating what Singapore has done. We are ready. Are you?
The core issue of the U.S. healthcare system is not its quality, which is among the best in the world, but its low cost-effectiveness and the misalignment between the cost of services and their actual value. Here’s a summary:
1. High Quality but Low Value
The U.S. leads globally in medical technology, advanced treatments, and pharmaceutical innovation, with top-tier hospitals and specialists.
However, despite spending far more than any other country (~$11,000 per capita annually, ~18% of GDP), its health outcomes (e.g., life expectancy, chronic disease management) fail to outperform or even match other developed nations.
2. Why Are Costs So High with Poor Cost-Effectiveness?
(1) Lack of Transparent Pricing
Patients cannot predict bills due to opaque and inconsistent pricing. For instance, the cost of a basic MRI or hospital stay varies drastically without justification.
(2) "Fee-for-Service" Model
Providers prioritize quantity (e.g., unnecessary tests, procedures) over quality of care, leading to inflated costs without proportional improvement in outcomes.
(3) Pharmaceutical Pricing
Drug prices in the U.S. are often several times higher than in other countries due to weak regulation on pharmaceutical companies.
(4) Administrative Inefficiency
A significant portion of healthcare spending (25-30%) goes to administrative overhead, such as insurance billing, rather than direct patient care.
(5) Market-Driven Healthcare
Unlike universal healthcare systems, the U.S. healthcare system operates as a market, prioritizing profit over patients' needs.
3. Lessons from Other Countries
Countries like the UK (NHS), Germany, and Japan achieve better cost-effectiveness by:
Implementing universal healthcare systems with either government funding (UK) or heavily regulated insurance systems (Germany, Japan).
Price controls on services and pharmaceuticals to ensure affordability.
Aligning the cost of care with its value and patient outcomes.
4. Solutions for Reform
To address low cost-effectiveness, the U.S. should:
Transition to value-based care, where payments are tied to patient outcomes instead of the volume of services.
Enforce stricter drug price regulations and consider importing cheaper medications.
Increase pricing transparency for medical services to curb unexpected bills.
Expand insurance coverage to reduce the financial burden on patients, possibly moving toward a hybrid public-private system like Germany’s.
Reduce administrative costs by simplifying billing and insurance procedures.
Conclusion
The U.S. healthcare system suffers from high costs, low efficiency, and poor alignment between service price and value. While its quality remains exceptional, serious reforms in pricing, transparency, and insurance coverage are needed to address its inherent cost-effectiveness problem.
What is the nature of the Singapore health care system? Is it predominantly a public system? How much of our inability here in the US to institute a coherent system, with an emphasis on primary care clinics, is due to the privatization of medical care, the role of mega insurance companies, middlemen such as "pharmacy benefit managers," etc?