Do We Need an FAA for the Healthcare Industry?
United Healthcare and Boeing Aerospace have both been in the news lately for management practices that put the public at risk. But the business impact on the two companies has been very different.?
Why is it that United Healthcare is setting records for financial performance, while Boeing is haemorrhaging cash and is on the verge of needing a national bailout (since it’s presumably too strategically important for the US to allow it to go bankrupt)?
Let’s start with what the two companies have in common:
Yet only one of the two, namely Boeing, appears to be experiencing negative business consequences. What’s going on here?
Theory 1: It just takes (a lot of) time for these things to play out.
According to some observers, Boeing’s engineering culture began its long downward slide in 1997 when Boeing merged with McDonnell Douglas. McDonnell Douglas’s CEO took over as CEO of the combined company and pushed executives to emphasize shareholder value. A GE-trained executive with no aerospace experience was also brought in as the new chairman of the board. Over the subsequent 25+ years, a stream of top-down management changes gradually eroded the safety culture, culminating in two 737Max crashes and the Alaska Air mid-air panel blowout. So under this theory, there might yet be some tipping point in UnitedHealth’s destruction of medical culture that will finally cause the company to crash financially.
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Theory 2: Aviation safety is easier to regulate than medical safety.
The linchpin in Boeing's business story is FAA’s authority to ground aircraft if they deem them unsafe. Boeing’s financial crisis isn’t a direct result of airlines or passengers avoiding Boeing equipment for fear of crashing. It’s also not mainly the result of the recent $2.5B criminal settlement with the feds. ($2.5B might sound like a lot, but it’s a drop in the bucket compared with Boeing's reported $33B in losses since 2018.) No, the proximate cause of Boeing’s financial crisis is the 20 month-long 737Max grounding back in 2019-20, combined with the threat that the FAA could ground planes in the future, combined with the threat that future Boeing planes coming off the assembly line might not get approved for service by FAA. When airlines are afraid of losing massive amounts of money due to not being able to fly their Boeing planes, then buying Airbus planes becomes a no-brainer. It all comes down to the financial risk that’s a consequence of the regulatory risk.
In American healthcare, we have nothing analogous to the FAA and their zero-tolerance attitude around safety. This might be in part because safety is much harder to measure in healthcare. Every commercial airline crash makes international news, and everyone understands that a crash means that something went terribly wrong and needs to be corrected. Quality systems and near misses are taken seriously as a result (even if Boeing was cutting corners). Patient death and harm, on the other hand, are so commonplace that it can be hard to separate system-based fault from patient factors.?And so bad actors, even ones as outrageous as this out-of-control oncologist in Montana are allowed to keep operating for years.
In the end, I think the best explanation is Theory 3: Lack of an accountability system with teeth. We simply don’t have any regulatory or other oversight system for healthcare safety and quality that’s strong enough to strike fear in the hearts of insurers, hospitals, and doctors, the way that FAA strikes fear in the hearts of airlines and pilots.?
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Associate Professor of Pathology, Microbiology, & Immunology at Vanderbilt University
1 个月In the end it is doctors that are on the hook for quality medical care. However, doctors feel like they have less and less time and control over they systems that they work in. Airplane building is done by companies, who employ engineers. The challenge is finding mandates with teeth that address corporate negligence and profit driven actors in health care without putting the burden of compliance on already overburdened clinicians who are just trying to do the right thing.
Assistant Professor, Yale School of Medicine. Experienced Leader, Author, Speaker, Consultant. All opinions and posts are my own.
1 个月Because UHG, like Epic, has a guaranteed funnel of income due to government mandates. We cannot not be customers. And there are not that many choices. Boeing has real market competition, and I am sure Airbus is the big winner here.
Healthcare Project Consultant and Patient Advocate
1 个月No we don’t. We need to priorize transforming healthcare from an annual physical or Dr visits to solve a medical issue to everyday wellness, screening and lifestyle coaching on a consistent monthly basis through new communications and diagnostic technologies and provided by retailers who can add healthy assortment choices to enhance the shopping experience
PhD Biomedical Informatics, BS Psychology, BSc(Hons) Computer Science and Physics
1 个月I think UHG actually has rather good management and is very effectively in pursuing it's corporate goals. The core problem is the contradiction between corporate profits and the health of it's insured members. Controlling both the insurance side of the business and the actual provisioning of associated medical services puts it in a very strong position financially. The morality of such an arrangement is a completely different issue. Boeing of course does not have such benefits. It builds aircraft and sells them, it doesn't get to sell tickets for flights, provision pilots or to operate the airlines themselves. UHC's business model is bordering on pure genius for a maximal financial return. Horrible for it's members health of course, but when would that stay in the way of a profitable business.