UK markets closed

Health care needs reform, but its biggest issue is cost: Experts

Anjalee Khemlani
Senior Reporter

Health care is lagging other sectors in reform and adopting technology — but the biggest issue confronting the system is affordability, industry executives said on Thursday.

Bernard Tyson, chairman and CEO of Kaiser Permanente, and Steve Van Kuiken, a senior partner at McKinsey & Co., told the Yahoo Finance All Markets Summit that costs weren’t the only issue facing the system. Health care is inefficient, and in need of “consumer-oriented” solutions to cater to younger constituents.

Yet rather than completely reshaping the ecosystem, health care providers should bolster the use of technology while keeping the current system in place.

For his part, Van Kuiken has previously written about the health care institutions being the “laggards” of technology adoption in the world today.

Yet with political pressure mounting ahead of the 2020 election, they questioned whether the system required fundamental transformation — a la a Medicare for All option embraced by most Democrats — or just an emphasis on reining in costs.

However, some major names are moving to address the problem via technology. According to McKinsey’s Van Kuiken, the entrance of Apple (AAPL), Amazon (AMZN), Google (GOOG) and Microsoft (MSFT) in the health care space can result in even more savings, because it solves the scalability problem that health care startups face.

Costs still the driving issue

07 August 2019, Hessen, Offenbach: Internist Matthias Zimmer (37) explains in a treatment room at the Ketteler Hospital the use of a booklet showing illustrations and words for complaints in Arabic. The Malteser Hilfsdienst offers medical treatment for people without health insurance once a week, anonymously if desired. Photo: Frank Rumpenhorst/dpa (Photo by Frank Rumpenhorst/picture alliance via Getty Images)

The Affordable Care Act, otherwise known as Obamacare, provided some answers, by opening up access to health care. However, the cost curve was never addressed — and consumers are now feeling the pain as health insurance prices soar. Families are still confronting the possibility of health care bills that may push them into bankruptcy.

However, given that the current system covers more Americans than before the implementation of Obamacare, Tyson suggested the U.S. should “really [be] focusing on affordability.” He added that “the issue is affordability, the issue is the cost of care.”

Tyson said that “where we got it wrong is we passed on too much cost to working Americans” — and that aspect should be addressed before any other part.

“And that’s what we have to bring together now,” he said.

Yahoo Finance's All Markets Summit on October 10

Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem

Read the latest financial and business news from Yahoo Finance