Saturday, 28 August 2010

A healthy prescription

The new US healthcare bill reduces Medicare payments for goods and services (other than doctors' bills and drugs) by an amount equal to the annual economy-wide increase in productivity.  The assumption is that the health-care industry can raise productivity by at least as much as the rest of the economy.  Of course the figures show that it has rarely done that in past years.
If it doesn't, is it just 'more inefficient' than other sectors.  Well, of course it is very labour intensive ... and it is 'service-intensive in that it relies on a lot of one-to-one interaction with the customer.

So times will get tough for the sector over the next few years ... unless, of course, there ARE real productivity improvements to be made .. and someone can unlock the secrets that lead to them.

No comments: