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chapter one
Making the case for Healthcare Affordability
This book is intended to answer a few simple questions:
Why isnât healthcare becoming more affordable?
How can healthcare become more affordable?
What can be done to achieve Healthcare Affordability?
Who needs to be involved to accomplish Healthcare Affordability?
Affordable healthcare and Healthcare Affordability
Affordable Healthcare continues to be an elusive goal as the expense of care continues to escalate and the investment itself yields a lower return. In addition, the third leading cause of death, following heart disease and cancer, are medical errors that increase cost, create waste, escalate risk and liability, and consume valuable resources that could be applied to quality care and patient care accessibility. Affordable Healthcare cannot be isolated nor consolidated to the multitude of singular and solitary subjects such as coverage, condition, outcomes, mandates, accessibility, and cost. At this point in time, it has proven to be true, Affordable Healthcare cannot be legislated in terms of how it is, how it has been, or how government wants it to be. Healthcare is about caring for, and healing patients.
Healthcare Affordability, on the other hand, can be achieved through the constant, relentless, and continuous pursuit for faster, better, more affordable, patient-centered care. In making the case for Healthcare Affordability, one must think differently. Itâs not about âin the box thinking,â nor âout of the box thinking,â itâs about ânew box thinking.â Creating a new paradigm of thinking, strategizing, and operating using a completely new archetype. In fact, it goes beyond the boundaries of the current state of the domain of care, encompassing the entire Healthcare Enterprise that includes: Healthcare Providers, Medicine and Pharmaceutical Providers, Healthcare Machine and Device Providers, Healthcare Service and Supply Providers, and Insurance and Payment Providers. It is a systems approach, focusing on attacking the root cause of the many problems, and providing solutions for increasing care delivery speed, responsiveness, quality, capacity, accessibility, and affordability.
Below are several opinions, from various sources, on the current state of Healthcare:
According to Forbes (Leah Binder), âThe Five Biggest Problems in Healthcare Todayâ1; (1) Too much unnecessary care, (2) Avoidable harm to patients, (3) Billions of dollars are being wasted, (4) Perverse incentives on how we pay for care, and (5) Lack of transparency
From HealthPAC online2: The issues to address in the reform of the healthcare system: affordability, portability, accessibility
CNNâs report on âAmericaâs 9 Biggest Health Issuesâ3: Doctor shortage, hospital errors and infections, antibiotic resistance, more do-it-yourself healthcare (apps and technology), food deserts, caregivers for the aging population, the cost of Alzheimerâs, marijuana, and missing workâlife balance
Healthcare Business and Technology published âTop 10 Issues impacting the Healthcare Industry in 2016â4: mergers, drug prices, mobile care, cyber security concerns over medical devices, money management, behavioral health moves to front of stage, community care collaboration, new databases, welcome biosimilars, and medical cost mystery.
The Medical Examiner5 tells us: Congress Has Forgotten Americaâs Biggest Healthcare ProblemâThe critical question is not who gets care, and who doesnât, but how itâs delivered.
The Physicians for a National Health Program6 claim: (1) Americans pay way, way, way more for health care than anyone else. (2) We pay doctors when they provide lots of care, not when they provide good health care. (3) Half of all health care goes toward 5% of the population. (4) Our health insurance system is the product of random WWII-era tax provisions. (5) Insurance companies have small profit margins. (6) Getting health care in the United States is dangerous (medical errors). (7) One third of health care spending isnât helping make Americans healthier (i.e., $765 Billion). (8) Obamacare is not universal health care.
Many of these opinions are quite a bit more qualitative than quantitative. However, a few are actually facts based. Regardless of the level of the use and utilization of data, it is apparent that there are many opinions, from many sources, for many reasons, with many âagendas.â All pointing in the same general direction.
Whether the observations are by opinion or by fact, it is clear to many that we are heading in a direction that is not making conditions better for the population. Weâre spending more and more on a system that is returning less and less. When you consider how our health investment compares to our life longevity with the rest of the world, you find that we are spending more, and getting less. So letâs take a look at some facts (Figure 1.1).
Figure 1.1 Worldwide life expectancy vs. health expenditures. (Data from https://www.ineteconomics.org/perspectives/blog/the-link-between-health-spending-and-life-expectancy-the-us-is-an-outlier.)
After this chart was created, our per capita spending in 2015 was $9,900, and our 2016 spending came in at $10,345, while life expectancy was barely affected. Obviously, our Healthcare has not gotten more Affordable, but instead, much more costly, with less of a positive effect for our future. In fact, when we compare our system with the rest of the worldâs economic leaders in terms of GDP, youâll find the gap is widening, while the quality of care is not. Once again, we are paying much more as a portion of our overall wealth, with a system that is not that much greater on a per person scale. If we go back in time, weâll find the per capita cost in healthcare in 1960 was $147.00, in 1970 $356.00, continuously growing until to $7,911.00 the Patient Protection Affordable Care Act (PPACA) was created in 2008 (Source: Henry J. Kaiser Family Foundation7 with 2009â$8,149.00 and 2010â$8,402.00). Since that time, according to HHS and OECD, 2014 came in at $9,442.00, 2015 ended at $9,900.00, and 2016 capped the cost explosion at $10,345.00.
From yet another perspective (see the graph below), using the GDP, we can compare the amount of wealth that is spent on healthcare worldwide. From 1980 to 2013, most of the developed countries around the world were spending between 5% and 9% of their GDP in Healthcare. Almost 35 years later, the U.S. is spending over 17% while the rest of the âpackâ are spending between 9% and 12%. Clearly, the gap has widened (Figure 1.2).
Looking back to 1960 and 1970, we were spending 5.0% and 7.3% of the GDP on Healthcare, respectively (Source: Bureau of Economic Analysis8). The forecast is bleak. Soon we will be spending 20% of our GDP, and when extrapolated, following the same path weâre on, 20% or more is possible. So, if we were getting our moneyâs worth, it would be safe to assume, spending more dollars, investing more of our economic wealth, our care should be best in the world.
From a technological, capable and quality perspective, the U.S. should be the best. After all, we have the best capability for highest quality health care through the most advanced technology available, and the best trained nurses and doctors. Below is a snap shot was taken by the OECD in 2013 of Health Date taken of 11 different countries across the world who provide quality care (Figure 1.3).
Figure 1.2 Healthcare expenditures as a percentage of GDP. (Data from OECD Health Statistics 2015.)
Figure 1.3 Worldwide healthcare rankings. (Data from International Health Policy Survey of Sicker Adults (2011) and Primary Care Physicians (2012), Commonwealth Fund National Scorecard (2011), WHO, and OECD Health Data (2013).)
The U.S. did not come in first or second in any of the categories. However, it did come in tenth and eleventh in many of the categories. Our system is not getting better. One approach would be to attack and heal the system in the areas that are easily under our control, such as medical errors. Medical errors are quite costly, in terms of care, in terms of risk and litigation, and even in terms of resources lost addressing errors that could be applied to providing quality care. In fact, medical errors are one of the leading causes of death in the U.S. (Figure 1.4).
Some personal observations and case-study perspectives
Iâve been serving the healthcare industry for 20 years. When I get engaged with a Healthcare organization, there are numerous wastes that are inherent in our healthcare systems. Specifically, there are three that typically appear:
Waiting: Patients waiting, patient care givers waiting, healthcare providers (i.e., physicians, nurses, technicians, assistants, and aides) waiting, machines and devices waiting to be utilized, with materials and supplies waiting to be used.
Excessive motion: Systems designed to cause workers to expend energy in movement and motion, in order to, âget the job done.â For example, nurses having to spend a great deal of their time going to storage locations to get materials and supplies to treat patients.
Medical defects: Being the third leading cause of death, flaws, and weaknesses in systems as a result of inconsistencies and imperfections of processes and procedures.
When addressing improvement opportunities, numerous institutions often follow similar traditional, conventional approaches. Many of the following symptomatic conditions are at play when it comes to performance challenges, waste elimination, defect and variation reduction, process improvement, and continuous improvement:
Figure 1.4 Cause of death in the United States. (Data from National Center for Health Statistics, BMJ.)
Lots of meetings, with lots of people.
Lots of charts and spreadsheets, with lots of data.
Lots of emails, copying lots of people.
An inherent âshame and blameâ culture, trying to find out âwho did it.â
âBusy-nessâ with lots of effort and lots of activity.
A cautious, defensive behavior by those directly involved.
A Physician-centered System based primarily on Physician Decisions and Physician Schedules.
A Revenue Cycle Focus putting money as the top priority for the organization.
âŚand lots more.
While conditions for improvement efforts have gotten better over the past 20 years, much of the same conditions often linger in pockets and places throughout the culture. During the past 15 years, approaches have advanced in quite a few areas:
Assign and task individual with improvement activities (i.e., more accountability for âfixingâ).
Increased awareness of focus on quality.
More performance feedback has been emerging.
New policies and procedures focused on âfixing the problem.â
Some incentives for resolving quality issues.
Punishment and penalties continued to prevail.
The emphasis to promote good will emerged.
The attitude to work harder to do better was embraced.
Four common themes for poor performance (Roger K. Resar, Making Noncatastrophic Health Care Processes Reliable: Learning to Walk before Running in Creating High-Reliability Organizations...
