The United States is having a breakdown in confidence in what should be the best healthcare in the world. Advancements in diagnostics, medicines, and treatments continue to gain speed, but the access to healthcare by patients is more costly and frustrating than ever, creating an uncertain future for healthcare. The healthcare industry is under strain to coordinate, cooperate, and deliver appropriate care at reasonable costs. The alignment of the system with the consumer seems broken or at least dysfunctional. Fortunately, there are rays of hope that signal improvement.
In this first in a series of articles, key challenges currently facing healthcare will be dissected, and new trends and opportunities revealed. The subsequent articles will dive into these trends and opportunities and discuss them individually. Finally, the last article will lay out a fundamental change and improvement for the healthcare system.
Healthcare Costs Increases are Unsustainable
If you listen to many in the press and government, the United States appears to be heading for a financial cliff in regard to healthcare costs. In 2009, the Social Security Advisory Board wrote a book called The Unsustainable Costs of Healthcare, and it’s hard to argue their message. Costs continue to increase faster than wages. CMS projects that healthcare will be 20% of GDP in 2025. It is not uncommon for consumer family health insurance policies to exceed $20,000/year with deductibles over $5,000, and employee health insurance costs are not much better unless subsidized by the employer. These high deductible plans turn their members into self-pay patients, because few patients hit their deductibles. Many patients cannot afford to hit these high deductibles. Therefore, providers are not getting paid by patients, or the patients just avoid receiving care.
Administrative and Regulatory Requirement Burden Healthcare Providers
In an effort to control the costs of services, share health information, and improve the efficiency of processing healthcare reimbursements, there have been numerous regulations, standards, and policies enacted. Unfortunately, the administrative burden of these regulations and technologies appear to have outweighed the benefits. In “A Comparison of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far” from Health Affairs, it is estimated that 25% of U.S. hospitals’ total spending is administrative costs. The industry has spent mightily on EHRs, Electronic Health Records, but only a small percentage of medical records are transferred between providers. Most patients still lack access to a complete health record across their providers.
Clinicians Are Experiencing Record Burnout
The increased administrative effort of regulations and the burden of cumbersome EHRs impact both the cost of care and the wellbeing of the care providers. In “From Triple to Quadruple Aim: Care of the Patient Requires Care of the Provider” from Annals of Family Medicine, it is stated that as many as 46% of U.S. physicians will experience symptoms of burnout and 68% of family physicians would choose a different specialty if starting their career anew. The emotional impact on physicians from burnout cannot help but trickle down to physician’s assistants, nurses, and other clinical and administrative staff. This situation becomes unsustainable as we face a growing elderly population and shortages in healthcare professionals.
Congress Adds to Uncertainty
With Congress continually threatening repeal of the ACA, the Affordable Care Act otherwise known as Obamacare, without agreeing on how to adjust and improve healthcare legislation, the healthcare industry is impeded from making long term plans and innovating to the level needed to make serious structural changes. Political debate between a) the scope of governmental involvement in healthcare and b) expansion of the government as the payer of healthcare create additional uncertainty for market participants.
Light on the Horizon
Although these issues appear to truly put us on the edge of a cliff in regard to healthcare, there are several areas that show promise. The impact of high deductibles and greater numbers of self-pay patients has created additional “consumerism” with a) stronger patient engagement, b) better understanding of healthcare choices and prices, and c) greater ownership of health issues and decisions by patients. While perceived as more expensive, Concierge Medicine and Direct Primary Care show promise. Their focus on proactive, preventive care can reduce the major expenses of hospitalization and chronic illnesses. There are numerous technologies that promise to improve our insight and understanding of a patient physiology. These technologies will lower the cost and improve the accuracy and cost effectiveness of care.
In the next article, Aligning Healthcare for Consumers, the discussion will focus on the new aspects of consumerism, Concierge Medicine, and how to gain alignment for both financial and clinical success.
by Matt Larsen, Principal, Healthscient
Published on Healthscient.com: August 7, 2017
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