The United States is known for its top-notch medical organizations and cutting-edge research that paves the way towards better treatments for patients around the world. However, American healthcare is consistently ranked on the lower end of world health rankings—the 2014 Bloomberg Health Efficiency Index ranked the US 50th out of 55 countries in “life expectancy, health-care spending per capita, and relative spending as a share of gross domestic product”; the Commonwealth Fund found the US to be last in a list of eleven major industrialized nations in “measures of access, equity, quality, efficiency, and healthy lives”; the World Health Organization (WHO) found that the US spends “a higher portion of its gross domestic product than any other country”— approximately $9,900 per person on health care according to the Center for Medicare & Medicaid Services—but still only ranks 37th out of 191 countries in key healthcare performance measures.
Right now, there is a lot of focus on what to do about the Affordable Care Act (ACA), or Obamacare. (Yes, they are the same thing.) There are arguments on both sides about why we should keep it or why it should be replaced with something different, but either way, most people can agree that basic healthcare should be something that is available to everyone—a right, not a privilege.
However, one of the biggest detriments to ongoing conversations around our healthcare payment system is the stifling of key innovative technologies.
By nature, healthcare systems are fairly risk-averse organizations. The chain of care provided across different clinicians and care settings requires a high level of coordination, and any change that disrupts that connectivity has the potential to frustrate medical staff, or worse, have a negative impact on patient care.
Additionally, many healthcare organizations operate on relatively thin margins, and projects that require capital expenditure usually have to be approved up to several months (or even years) in advance during annual budget planning meetings.
Here’s the problem: even after approval, these projects can only be executed if the expected funding comes through. Most of that funding comes from Medicare/Medicaid reimbursements, government grants, and charitable donations. Changes to these funding streams sets off a ripple effect that echoes far past the surface-level dollar amounts: well-developed plans evaporate and much-needed innovation is subsequently stifled.
The amplified difficulty in understanding how health systems will be reimbursed will make adopting innovative technologies even more difficult than it currently is. With so many questions in the air regarding payment, it’s highly likely that health systems will not prioritize spending on new technologies until these issues are settled (again). Focusing so intently on fixing how we pay for healthcare detracts from other issues that could have a larger impact in both cost and efficiency improvements.
Why is healthcare in the US so expensive yet ranks so low?
Here are three main issues that contribute to the high expense of healthcare and directly impacts the quality of care received in the United States:
Disproportionate expenditures on tertiary care
Healthcare is generally broken into three (sometimes four) different tiers:
- Primary Care – What most people envision when they think of going to the doctor. This is your annual physical or when you schedule an appointment because you’re not feeling well.
- Secondary Care – Specialized care, such as an appointment with a cardiologist or orthopedist to address a specific health issue.
- Tertiary Care – Typically refers to inpatient and other advanced medical services, such as surgeries.
- Quaternary Care (sometimes) – Categorized as highly specialized, uncommon, or experimental care.
We all know that we should be going to the doctor for annual check-ups, as primary care is the key factor in helping medical teams catch and treat issues early. It provides patients with appropriate education on how to manage their health.
Unfortunately, the vast majority of patients in the US don’t seek care until they’re really sick—many people leverage emergency department services instead of using their primary care physician. Consequently, the care needed to make the patient well again is much more expensive and may also have undesirable long-term effects, resulting in even more care costs over time.
Two great examples of this are diabetes and asthma, the two most common diagnoses and challenging diseases in the United States. They both require diligent maintenance to keep under control, and patients who have these problems and don’t know how to manage them are likely to end up in emergency care or even hospitalized. At that point, it will take a higher level of intervention (and associated costs) to get the patient well enough to go home.
Even after the patient heads home, the price tag for this medical episode may continue to rise if they have to pay for ongoing medications and follow-up appointments. There may even be ancillary costs incurred to the economy as a whole if the patient isn’t well enough to go back to work (or physically isn’t able to work due to frequent hospitalizations).
50% of patients don’t follow through with physician treatment instructions. It’s estimated that half of those patients are intentionally non-adherent and the other half don’t understand the regimen they’ve been prescribed.
The most common form of this are people not taking a prescription as directed or until it’s finished. Many therapies or regimens that are prescribed require the patient to finish the course of treatment or risk a relapse. Not following a doctor’s orders results in “a waste of medication, disease progression, reduced functional abilities, a lower quality of life, increased use of medical resources such as nursing homes, hospital visits and hospital admissions.” All of these result in increased and, in many cases, unnecessary costs.
Patient adherence is getting even more important as we start seeing a larger push for care teams to make sure a patient is following the instructions they were given. However, this continues to perpetuate the idea that the physician is responsible for making the patient stay well, not the patient themselves.
It’s usually the provider or hospital that gets penalized for patients that are readmitted or continue to have relapses. While it’s important for us to keep our healthcare providers accountable, we are missing the crucial link of patient accountability. The removal of the patient from the responsibility for their care makes it unlikely that patients will see or understand the cost ramifications of non-adherence.
Defensive medicine can manifest itself in a few ways over the course of a patient’s care—it may as be a doctor who performs a large amount of diagnostic tests to rule out various potential diagnoses, or a doctor agreeing to additional tests, medications, or therapies at the insistence of their patients. Sometimes we see it when a fully-insured patient is approved by their doctor to stay in the hospital a few more days. While it might not technically be necessary, if the insurance will cover it, additional time may assist with reducing the likelihood of readmission.
While the impact of defensive medicine is challenging to measure, it still presents a myriad of additional costs that may or may not actually be needed. In America, you can sue a fast food chain if you get burned because your coffee is too hot (which actually wasn’t as frivolous as most people thought it was) and where your patient knows more about what medications they need because of the ads they saw on TV (did you know prescription drugs can’t be advertised to consumers in Australia?). This presents a precarious environment, one where healthcare providers need to protect themselves while also listening to their patient’s wishes. This can sometimes result in a patient receiving unnecessary diagnostic tests or medications.
Help is on the way… if we let it.
In short, a lot of us already knew how complicated healthcare was before the new administration took over. The problems that we’re seeing today are the result of decades of issues piling up, and the positive steps we’ve taken are directly becacuse of decades of work finding and implementing solutions. While there are no silver bullets to fixing these problems, there are healthcare technology solutions that exist to help with these issues.
Telemedicine and messaging applications make it easier for patients to connect with their primary care physicians. There are applications to remind you when you need regular healthcare checkups or to help your physician’s office reach out to you. There are many applications that can help patients track their medication doses and remind them when their next one is due. Real-time clinical decision support and education for both clinicians and patients will make it easier to agree on the right diagnostics, treatments, and regimens to try.
Continuing to only focus on healthcare’s payment processes prohibits us from digging deeper into why our healthcare is significantly more expensive than anywhere else in the world (and also doesn’t consistently produce high results). Being able to pay for inefficient healthcare only addresses the financial side of the problem—it doesn’t address the underlying (and more meaningful) medical reasons for the expenses themselves.