Keynote speech by Tomáš Macháček
I would like to start with reminding what we have experienced in the past nine years by organizing the Prague International Summit and make some conclusions on where we got.

While participating in this conference in the past nine years and experiencing all the great speakers, their presentations and their content, I have realized that we are working for all these years to share concepts and case studies, which in fact are a phenomenon that create the future of the health sector. I think we got a little bit tired, because we were just learning and some participants of this conference in the past started to question, why we are telling all this to them and why we should talk here about these things, when the reality is completely different. They have their everyday problems and we are sometimes even bothering them by telling what they should do. The current summit had a brand new and unique concept and I would like to follow up on what Jim has said: Enough of learning, lets start doing something. And I think this should be the core concept of this summit. Now, I would like to mention just some of the things that happened in the past.

The past, one can say is the basis for what will happen in the future. I would like you to consider this summit as a new start, something that will provide us with new energy. Also you should note that this summit is not organized by Reforma zdravotnictví anymore, but by the CEE HPN. I will definitely enjoy the summit more than in the past, because as Jim mentioned, I am not stressed of taking care of things that should work. I also have to say that on this summit you will be able to see some kind of professionalism, which we have not, I think, ever achieved. The organization of this summit is on higher level.

I would like to remind you a few things and start with the values of this conference. We were always striving to bring new innovative approaches to this conference – this is in fact our mission. We always knew that this not going to be a crowded conference and we wanted to make it very interactive and diverse. We, not only wanted to attract here people from various geographical regions as the audience, but also choose various approaches to solve our problems. And when you group these three facts, you get the following – ability to bring innovations, diversity and some kind of flexibility and interactivity that means the ability to react and make a dialogue. You should realize that these are exactly the attributes missing in our current healthcare system. In fact, at this summit we are creating examples of possible changes to the healthcare system, which are often in contrast from what we are experiencing in reality.

The current healthcare system, or if you want healthcare industry, is very self-centered in developed countries. It is some kind of an animal or organism, which listens only a little bit and is very authoritative in relation to those, whom it should serve. The potential reason, or in fact, the actual reason is the fact that the system is very uneconomic in two main aspects.

First, there is a lot of wasting due to the massive production of services, which in fact have no value. This is a very impolite sentence, but there is a lot of work behind producing things, which at the end of the day are useless. People, who hear this sentence feel concerned and claim they work a lot for accomplishing things. The work is great and also the aim to do it is great, however, the important thing is the result. Due to the fact that the system is wasting a lot, it creates in all of us some kind of a psychology of shortages and we, the consumers, feel that we are a nuisance to the system. We experience queuing and this is the last sector where we can nowadays see queues. Here, in post-communist Europe we know this feeling very well and we know, why we experienced it. We experienced it, because our whole system was uneconomic and the current healthcare is also a very uneconomic system. It is a fact that is well know to us, however, it is not the worst thing, at least not to me.

Second, the biggest reason for not being able to achieve a change is that the system is not flexible at all. The system cannot flexibly react to changes and to the needs of those, for whom it should serve. The most brutal stories are those on how chronic diseases are being treated. In fact, it is interesting that the healthcare industry created these chronic diseases. It sounds weird, when I say it like this, but it is like this. If there had not been the expansion of healthcare, we would not have here all these chronic diseases. We would not be able to treat people in a way we can treat them nowadays. However, the expansion of healthcare is not the only and maybe not even the main reason for that, because people would be dyeing on other than chronic diseases.

This is a big problem and it seems that the industry cannot cope with this problem. Of course the main question is why. All these questions were challenged on this conference in the past.

The reason, why the sector looks as it looks like and behaves as it behaves is undoubtedly coded in the way it has been established. We have to say and it is good to note that what we see nowadays as the largest sector of the economy and one of the strongest economic phenomenon of modern states has not existed a hundred years ago. And it is good to realize how we got to where we are now. I dare to say that it is caused by two phenomena, which support each other, which create the system where we live, and which are also the roots of our current problems.

The first is that somebody else pays our bills and the second one is that somebody else decides about what we can get and what is good for us. This is clear from the traditional doctor patient relationship and from how the society perceived health issues and healthcare in the beginning of the last century. Thanks to the atmosphere that prevailed at that time, we gradually began to generate funds with a sole purpose of financing our consumption of healthcare services. When you think about it and when you think about the process of how we are actually getting to health treatment, you will realize that a system of nationalized charity was built. Actually we are all subject to such nationalized charity and we contribute to this charity, as well. And I would like to emphasize that even though there are these two roles we participate in, it is not to say that we are customers of the healthcare industry, on the contrary. We, on the one hand, contribute compulsorily to this charity, then the money has someone else and afterwards it provides us healthcare services. Charity, of course, is great, it is an amazing invention, but it should be used only where it is really needed and should not be a main principle, on the basis of which a whole system actually operates. It is not surprising that the industry has developed itself to such a form, because the industry thrives on the fact that services are provided for free and that it has secured sales. This phenomenon leads to deep, in fact, structural decisions and concerns everything in the process, which results in the provision of service itself. It affects the structure of these services and of course the investments in the industry. This is why it would be good to have these two little phenomena uncovered and deal solely with how the cash flows in the system, how decisions are taken and about how these sources will be utilized.

When George Halworson held a lecture at this conference and tried to tell us a very simple thing he said – healthcare is an economic system, because services are bought and sold and in each economic system you get exactly what you paid for. He also said, if you want to get something else, you have to pay for it in a different way. And this is not only valid for specific applications, he spoke about the need to create integrated systems where the cash flow supports the optimization of the flow of healthcare services. In this regard, he presented a very efficient way to do this just by changing the cash flow.

Now we can look at how the cash flows into the system at a higher level, i.e. at the level of the system itself. It would be good for you to note that nowadays there is no developed country, where healthcare services are not ultimately financed from funds created from compulsory contributions. This claim concerns the United States, as well. This implies that someone, in this case, the state or legislation forces you to contribute to these funds. I just want to say that if you are contributing to these funds voluntarily, it does not necessarily mean that it will not be a charity. It is just like that, you contribute to the fund, but you do not buy something, in fact, you do not buying anything. You are not buying a product, to which you could assign the value you paid for in the fund, because what you paid for is a contribution for the charity, not a price, for which you bought a product. And when you give this money compulsorily to the government, you should realize that this money belongs to the government and not to you. This is very important, because then the government decides what to do with this money.

Basically three possible models were developed about how the government can use the money. The worse is when the state actually acts as the operator of the charity. This is a very old concept and it is actually the one, on which the British NHS is built on. There you can notice a nice paradox and how the political language is adapted in a way that such concepts are accepted by the people, i.e. by the voters. When you read the preamble of the British NHS, you can find already on the first page a statement saying this is finally not a charity, because you are paying from your taxes and this is a services provided to you by the state for paying taxes. This is really written there, however, this statement is not true. Conceptually, it is still the old model, in which you pay taxes, i.e. you contribute to the charity and the state provides you that charity. That means that the first option a state can do with your money is that it constructs, or actually expropriates hospitals, starts to operate them, owns them, begins to recruit personnel and manages the whole system.
The second option to be accomplished by the state is that it will fund the providers of medical services. These providers partially belong to the state, partially not, however, in this option the roles are separated. Currently, the government tries to persuade us that the services are purchased on our behalf, but it is not true. The state finances those providers and in fact, creates the expansion of the industry, because providers create those services provided to us by the state for free. It is a single payer system and it is not something that could work. We know nowadays that the best a government can do with that money collected from us, is to give us that money back. It should not spend it on managing hospitals and financing these hospitals, but give us that money back. Give it back to us, so that we can afford to buy an insurance product on the market. And this is a system that works in various forms, in which the state or the government operates as a sponsor. It is the state, which acts as our sponsor so that we can buy health insurance. This is the core of the Dutch system and it is a hope to us, because people get that money back and have it at their disposal. They can use that money for, what they think, will bring them value. On the one hand, there is the market and on the other the providers, which have to compete for the customers, because there are plenty of other providers offering similar products. If the provider is not going to be sufficiently accountable to the customers, he/she can lose those customers. This happens on the level of money. And the last step, which is the most important to achieve, is to enable the customers to spend the money given back from the sate somewhere else. It is important so that they do not have to spend it in the healthcare industry, so that they can think about how they will utilize it. They should be able to realize they can spend the money somewhere else, when behaving in a specific way, choosing a health insurance product, which enables them to benefit from the situation when they do not utilize healthcare services. In this arrangement the system will start to work, because the industry will be confronted with all the others providing various products and services that you can buy. In this way, something will start to work that works everywhere around. The industry itself will have to prove that the services it provides have value for the customer, which is worth for them to spend money for. This is on the level of the money, on the level of the cash flow.

The other problem is, who is the main decision-maker in the system. Here we have a bit of a difficult position, because there is always somebody else deciding instead of us about what we need and what we will get. I was mostly influenced by two sentences from the economic literature or from the healthcare related economic literature, both coming from the same author. One of the sentences reads, healthcare services are unavailable because they are free. The second sentence is more complicated and reads – you are told that it is very difficult for you to know, what kind of healthcare services you really need, however, isn’t it even more difficult to find somebody who you can trust in making this decision for you?

We are in captivity of two myths, which claim we cannot decide what is good for us. One of the myths says that medicine is complex and that things happening there are beyond our comprehension. According to this, we are not able to structure that space in the way enabling us making good decisions. And the second myth says that even if we were able to make those decisions, we would be making them under pressure, behaving infirm due to our disease. It is again related to the money, but you may notice that the industry focused on the doctors and not on the patients creates a documentation structure, reporting structure, which is very hostile to those customers. It is as if like you came to the hairdresser, who would give you the option of choosing among 5 hairstyles and told you to choose one. However, instead, the hairdresser shows you nowadays a list of services offered, in which you can find 20 various haircuts with scissors, blow hair tonics, consumption of materials, the rent etc. And then there is more – this is my time and here is the bill to be paid.

You should note one thing that when talking about prices, we always derive them for the costs, which is everywhere else refused to being accepted. The reason behind this is that we pay for the value of the service provided and not for how much those services cost the provider. But in healthcare, these products are communicated to us in such a way. Then it is not surprising that no one understands it and then it is easy to say that you are silly and that you do not know what you want. It is as if someone sold you a car and instead of telling you what its basic features are, he/she would explain what the basic technical and physical principles are affecting the car to be moving.

So in this way we have covered the industry, which is constantly growing and needs more and more money, produces more and more services and tries to tell us that all these services are needed and have value for us. However, somebody else decides on what we actually need and somebody else is paying for us.

But beware, because in the last decade, the regular customer starts to play a new role and will stop to accept this game. These regular customers belong mostly to a young generation with chronic diseases. This young generation of chronically ill patients is a new phenomenon, which started to appear in this industry in the past decade. These patients are people who know they will have to face their disease throughout their lives and also throughout their productive lives. They have to and, at the same time, they want to understand their disease in a strategic way as they understand their family, education or career. It is due to the reason that the disease influences all spheres creating the strategic concept of their lives. They simply take their disease seriously and will obtain the information about what is good for them and will start to behave in such a way. This is the reality, these people already exist in the healthcare industry and there are more and more of such people.

As they create an autonomous concept of healthcare, there is something unique happening. Their goal is not to utilize as much healthcare services as possible. Their goal is to maintain their health. Their goal is to manage their chronic disease in a way that makes them healthy. Indeed, it is like this, they have a problem. In fact, each of us may have health problems, even the healthy ones and we can say that thanks to these young chronically ill people, the concept of health is changing. We can also say that each healthy person has actually a special case of a chronic disease. This is not a joke. It is a mental loop and it is also a paradigm shift, because the young chronic patients create a concept of caring for health. They do it by taking care of their health status exactly in the same way, as they would be treating their potential disease. Why people do not do it in this way is beyond the scope of my speech.

This group of young chronic patients creates a customer segment, which will act as watchdog of the market with healthcare services. Each market operates in a way that five, seven or ten percent of consumers are sensitive to prices and look for alternatives. They are also aware of what they want. This segment of consumers can eventually control the whole industry. This seven or ten percent of people will actually decide about the success or failure of those, who provide those services. At the end of the day they will also decide about their profit margins. And so, you should remember, thinking about the industry in any way from any position, you will have to serve the customer in such a way as other providers of services do in other markets.

So this means that we have a solution and we need to accept it and do something for it. I also wanted to say one more thing in regards of the solidarity. Solidarity in the healthcare system is not about contributing to the charity. Solidarity is about making the government respect our values and if our value is solidarity, then it should respect that we want to be solidary. This is not manifested by utilizing as much healthcare services as possible or by wasting or by being provided with services that we do not really need. Solidarity is about making the government allocating money to those cases, where they can be saved most easily. Those are extremely expensive technologies and extremely expensive cases, which are often the only alternative for people in a situation, in which he/she needs that technology. The government is trying to tell us that it is effective to let these people die or leave them without care. Solidarity is that we will not let the government doing it. But then we have to ensure that the system will be effective and will not waste money. We can take care of this, when the system acknowledges us the role of a customer.
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