Health Care Reform

When discussing health care reform, politicians usually concentrate on increasing access for a greater portion of Americans as one of the goals, with finding sustainable ways to finance that access being the second goal. In the last few decades there have been numerous attempts at reforming the American health care system, with very little, if any, success.

Starr (2011) points out that several presidents and members of Congress have actively supported some form of national health insurance or universal coverage for all Americans over the last fifty or so years, with very little to show for their efforts. The most ambitious attempt at national health insurance, made by President Bill Clinton, was soundly defeated in 1993; the campaign against it was funded by massive outlays of money from physician groups and third-party health insurers. The desire for health reform became a major issue in the 2008 presidential campaign, contributing to a win for President Obama and the Democrats. This victory brought forth the latest attempt at health care reform, the Patient Protection and Affordable Care Act, which is better known as the Affordable Care Act (ACA) and which was passed by Congress in 2010. This new law is attempting to make major changes in health care delivery that will ultimately affect all health care organizations and consumers of health care services in the United States.

Patient Protection and Affordable Care Act (ACA)

Signed into law on March 23,2010, the ACA seeks to increase the quality and availability of health care coverage for most Americans.

The Congressional Budget Office (2011) points out that this new law should provide insurance for most Americans while reducing the federal deficit over the next ten years. The law currently contains nine titles, and each one addresses a key piece of health care reform. Critics argue that the new law is nothing more than government-run health care that will cause the government deficit to explode while doing very little to improve the health of most Americans. Supporters of the health care reform effort point out that the new law requires insurers to cover preventive services and immunizations and to provide continued coverage for dependent children up to age twenty-six, eliminates lifetime annual limits on benefits, and extends coverage to those who are uninsured because of a preexisting condition.

As Koh and Sebelius (2010) show, the Affordable Care Act offers a whole array of prevention initiatives, including funding through Title IV of the act. These initiatives deal with the prevention of chronic diseases by improving access to clinical preventive services. However, Starr (2011) points out that although the Affordable Care Act does require major changes in how health insurance works, it does little to change how medical care is organized and will not accomplish long-term reductions in the cost escalations of health care delivery. Wennberg (2010) argues that true reform of our system of health care will require a movement from delegated decision making by the physician to shared decision making with the patient. It will also require a movement to an organized system of care delivery that begins to eliminate wasteful testing and procedures that may place the patient at extreme risk while offering the patient very little in the way of medical value.

According to Schimpff (2012), “The first step in any set of decisions about the future of health care is to envision the care system, then the payment system. Most efforts to date begin with the payment system and ignore the care system” (p. 29). This suggests real problems for health care reform because, historically, we have never been able to get beyond costs and into the improved health care outcomes made possible through a redesigned health care system. Christensen, Grossman, and Hwang (2009) argue that the practice of medicine needs to move from intuitive medicine to empirical medicine, finally emerging as precision medicine. According to Christensen et al. (2009), intuitive medicine involves diagnosis and treatment of disease-based symptoms with treatment that is uncertain. In contrast, precision medicine involves accurate diagnoses of the diseases underlying the symptoms along with treatments that are predictably effective. In order to move from intuitive medicine to precision medicine, providers need the results of cost-effectiveness analyses that can identify the medical interventions that actually improve health, and at what cost. According to Fuchs (2007), health care reform is inevitable in the United States simply because current escalations in costs are not sustainable. In order for health care reform to be successful, it must improve cost-effective care by providing the physician with information about appropriate care and incentives to change the way health care is delivered.

Agus (2011) agrees that two very important components of health care reform are the growing database of empirical medical information being supplied by information technology and the addition of provider and consumer incentives to the health care delivery process. Medical information can be mined and converted to knowledge made available to the physician as evidence-based recommendations and then shared with the consumer in the form of medical care customized to his or her needs.

Cost-Benefit Analysis and Comparative Effectiveness Research

In the real world of economic rules and limitations, markets of supply and demand distribute resources that utilize the price system to make allocation decisions. In many cases the price system in our economy acts as a rationing force to exclude lower-income individuals from many high- price purchases. This rationing function should also serve as a regulating mechanism to force consumers to make rational choices for products and services due to a limited budget. Price can also provide incentives for individuals to work harder if they want to achieve the income level required to purchase higher-priced items in the economy. Markets for goods and services, along with a price system, allow a capitalist system to deliver superior output at reasonable prices to those who can afford the purchase. The regulating mechanism that discourages waste and inefficiency is the price system. Unfortunately, this price system usually favors those with higher incomes, allowing them to receive larger amounts of the goods and services available in an economy.

Phelps (2010) observes that the health care sector of the U.S. economy shares many characteristics with the rest of the economy but also exhibits many differences. These differences involve government reimbursement of some health care; uncertainty about the availability of care, which may depend on where you live and whether providers will accept your insurance plan; and the large difference between the provider of health care and the consumer of this care in their knowledge of medicine. In many ways the health care sector has defied normal market reactions to high prices and poor quality services. These market differences have made it difficult to apply economic analysis to the health care sector in an attempt to improve its performance.

One of the economic evaluation procedures used by many economists is the cost-benefit analysis (CBA), which compares both costs and benefits in dollar terms to estimate the strengths and weaknesses of alternative choices. (The costs and benefits are adjusted to their present value through a process called discounting that accounts for the passage of time.) Thus, if a program demonstrates a net benefit, it is considered to provide good economic value and, other things being equal, should be continued or perhaps even expanded. It must be mentioned that rational individuals also practice cost-benefit analysis every day when purchasing most things other than health care. Whenever they shop for a product or service they usually compare price with value before making a purchase decision. The free-market economy usually allocates resources based on information that becomes available through the price system. Nas (1996) argues that the impact of CBA grew significantly in the 1960s because the federal Office of Management and Budget made such analyses a principal tool in the evaluation of government programs. The CDC has been using CBA for years to evaluate the costs and potential benefits of prevention programs (CDC Evaluation Working Group, 1999). In order to compare different prevention strategies, researchers need reliable and consistent cost and effectiveness data.

cost-benefit analysis (CBA)

A way to estimate (in dollar terms) the strengths and weakneses of alternative choices in terms of benefits, time, and costs.

Table 2.1 offers an overview of the various types of economic analysis used by both for-profit and not-for-profit organizations when they make decisions. Among government agencies the most commonly used forms of economic analysis are cost-benefit analysis and cost-effectiveness analysis. Cost-effectiveness analysis compares the cost of an intervention to its effectiveness as measured in health outcomes, such as the number of years of life saved, whereas cost-benefit analysis assigns a dollar value to the outcomes.

cost-effectiveness analysis

A method of comparing the cost of an intervention to its effectiveness as measured in health outcomes.

Table 2.1 Overview of Economic Evaluation Methods

Economic Evaluation Method

Purpose of Method

How Health Effects Are Measured

How Results Are Expressed

Cost analysis

Used to compare net costs of different programs, for planning and assessment

In dollars

Net cost; cost of illness

Cost-effectiveness analysis

Used to compare interventions that produce a common health effect

In natural units

Cost-effectiveness ratio; cost per case averted; cost per life year saved

Cost-utility analysis

Used to compare interventions in terms of morbidity and mortality outcomes

In years of life, adjusted for quality of life

Cost per

quality-adjusted life year (QALY)

Cost-benefit analysis

Used to compare programs with varied units of outcomes (health and nonhealth)

In dollars

Net benefit or cost; benefit-cost ratio

Many of these principles have been carried over for use in comparative effectiveness research (CER), which is designed to inform health care decision makers by providing evidence on the effectiveness, benefits, and harms of different treatment options. It involves studying two or more existing health care interventions to determine which ones work best for which patients and which offer the greatest benefits or pose the greatest detriments (Jacobson, 2007). This economic analysis usually addresses both effectiveness and costs, asking whether a given medical treatment or procedure actually works and, if so, whether its medical value is sufficient to justify its cost. According to Weinstein and Skinner (2010), the use of CER by government agencies resulted from the government's overriding concern with runaway health care costs.

comparative effectiveness research (CER)

Research into the relative effectiveness, benefits, and harms of different treatment options.

There is widespread agreement among health economists that a large number of medical tests and procedures will prove to be wasteful when subjected to rigorous analysis of their benefits, let alone their large costs. This issue becomes even more significant when we realize that many medical procedures are very dangerous for the patient while providing little if any medical benefit. According to the Congressional Budget Office, (2011), there is very little evidence currently available to tell us which treatments work best for individuals, despite the fact that many of the newer treatments cost a great deal more than previous ones. Unfortunately, the U.S. health care system tends to rapidly adopt expensive new technology and treatments in health care delivery without any real evaluation of their true value or cost. This is where CER comes into play, because it gathers evidence that compares different medical interventions in terms of costs and patient value.

CER has become the latest version of economic decision making related to the use of scarce health care resources. It can help us to determine what medical interventions work best so we can target our resource use and improve health outcomes. Mushlin and Ghomrawi (2010) point out that there is a lack of understanding among health policy experts about how CER works and what it attempts to accomplish. They also argue that fears exist that CER threatens the autonomy of the physician, and a concern that health care will be rationed for some Americans even though they have health insurance. Emanuel, Fuchs, and Garber (2007) comment that it is important that both cost and effectiveness information be communicated to all the stakeholders involved in medical decision making. Everyone needs to become aware of the results of reliable, trustworthy, and legitimate CER results so that wasteful, dangerous, and expensive medical tests and procedures can be eliminated.

This increase in economic analysis of medical tests and procedures is starting to gain support from unlikely sources. Rabin (2012) states that nine medical specialty boards have recently recommended that forty-five common medical tests and procedures be used less frequently. These boards also recommended that patients begin to question their physicians about the need for many routine tests and procedures that are regularly ordered. This represents a monumental change in the attitude of the medical profession, which is finally acknowledging that many profitable tests in medicine are not necessary and may actually produce harm for the patient. Some of the medical procedures that are no longer recommended are EKGs done during routine physicals, MRIs to diagnose back pain, and antibiotics to treat mild sinusitis. In the past these have been routine recommendations made by many physicians. It is thought by many health policy researchers that unnecessary treatment may account for as much as one-third of all medical spending annually in the United States. Brody (2012), for example, argues that we now know that one-third of health care costs could be eliminated without depriving the patient of necessary tests and medical procedures. He believes that the elimination of wasteful testing and unnecessary medical procedures is not rationing but sound practice of medicine. In fact it may also represent protecting the patient from tests that are not only wasteful but that may expose the patient to such dire consequences as excess radiation, medical errors, adverse drug reactions, and several hospital-acquired infections.

CER has become a major factor in the government's ongoing effort to reform the health care sector of our economy. Weinstein and Skinner (2010) argue that CER offers the opportunity to substitute cost-effective medical interventions with high-quality health outcomes for those medical approaches that are more expensive and usually result in poorer health outcomes. This is exactly what is required to save the U.S. medical care system from bankruptcy and focus all its limited resources on producing the best health outcomes at an affordable price.

CER offers the opportunity to discover the evidence that is so necessary if clinicians, payers, and consumers are to make good decisions concerning medical choices. Mushlin and Ghomrawi (2010) state that the “final result should be that important medical decisions will be guided and influenced by the scientific community, not solely the capricious nature of the marketplace” (p. 152). They also note that the vast majority of Western countries that have reformed their health care systems have used some form of CER. The countries using this form of economic analysis hope to better inform consumers, clinicians, and purchasers of health care services so that they can make decisions based on good evidence that will ultimately improve individual and population health. These decisions will help eliminate wasteful spending, lower costs, and ultimately improve the quality of health care services.

Electronic Medical Records

An electronic medical record (EMR) is nothing more than an electronic replacement of the paper chart that would be generated by one particular provider. Physicians purchase EMR systems to use in their offices. An electronic health record (EHR) is a record of a patient's health information generated over time across the various health care delivery settings and providers used by the patient. The EHR connects these various clinical settings and providers and also includes such information as patient demographics, progress notes, medications, past medical history, immunizations, laboratory data, and radiology reports. The important aspect of this record is that it becomes a virtual medical file that can be made available to the patient and all providers of care at any time and any place. Christensen et al. (2009) point out that the EHR allows data that were once available only to the physician and the hospital to become a tool that shifts control of the medical record to the patient In addition, Fallon, Begun, and Riley (2013) point out that the adoption of the EHR for both inpatient and outpatient care can go a long way toward improving the quality and safety of patient care.

electronic medical record (EMR)

A systematic gathering of all medical information concerning a given patient in a digital format.

electronic health record (EHR)

A record of a patient's health information generated over time across various health care delivery settings and providers and available at any time and any place.

According to Sultz and Young (2011), as we move into the future of health care delivery, physicians and nurses will rely more on computer- based decision-support systems accompanied by electronic programs that outline best practices in health care delivery. EHRs focus on the total health of the patient – going beyond the standard clinical data collected in the provider's office to achieve a broader view of a patient's care. EHRs are designed to reach out beyond the health organization that originally collects and compiles the information. They are built to share information with other health care providers, such as laboratories and specialists, so they contain information from all the clinicians involved in the patient's care. Health information technology, especially EMRs and EHRs, will become a much greater part of medical decision making by both the health care provider and the consumer of health care services. This technology should result in better health outcomes, improved quality of service delivery, and ultimately, lower costs for health care services. Fuchs (2012) believes that if the system of health care is well organized, there will be tremendous advantages for patients and providers in the widespread use of EHRs. According to Kenney (2008) it currently takes far too long for new scientific knowledge to reach physicians. The rapidly accumulating, evidence-based medical information on medical procedures that have a positive value and on best practices needs to be disseminated to physicians in a more timely fashion. He believes that evidence-based care can work best when supported by EHRs, along with treatment guidelines that include various treatment options.

Halvorson (2009) argues that EHRs need to be patient focused, having all of a patient's medical records linked together with a full complement of computer tools that allow all doctors to use the same data for attainment of desired patient care. Halvorson believes that electronic records need to support the business model found in other industries that rewards successful outcomes and goal achievement.

One of the best EHRs, VistA, has been developed and used by the Veterans Administration (VA) for years. According to Longman (2012) employees of the VA, working mostly on their own initiative rather than under managerial direction, developed this EHR many years ago and have been improving its capabilities ever since. VistA (Veterans Health Information Systems and Technology Architecture) uses an open source software program that has been made available to everyone. Longman offers several examples of the advantages of this software in his book Best Care Anywhere: Why VA Health Care Would Work Better for Everyone (2012). One example of its successful use is found in the fact that all VA patients and all their nurses wear ID bracelets with bar codes. This allows computer verification that the right nurse is with the right patient with the right medication to be administered. If a mistake is about to be made, a computer-generated warning is administered. This has allowed the VA to eliminate prescription drug errors while these errors still persist in other U.S. hospital systems.

VistA (Veterans Health Information Systems and Technology Architecture)

An electronic health record system that operates throughout the VA medical system.

Another example of successful technology use cited by Longman is found in a new program called My HealtheVet. This program allows an enrolled individual to access his or her own complete medical record and to share this record with family members. Having this virtual record allows patients at one VA facility to visit other VA centers and know that their medical records will be available to staff there.

My HealtheVet

A program that gives veterans, military personnel, and their dependents electronic access to their medical records.

Health Promotion and Disease Prevention

According to Koh and Sebelius (2010), the poor health of a large number of individuals in the United States is due to preventable conditions. Americans are receiving only about half of the preventive services recommended to them, demonstrating the need for a greater role for health promotion in our current health care system. The Affordable Care Act attempts to rectify this problem by offering a wide array of prevention services along with the funding to pay for these services. Maciosek, Coffield, Flottemesch, Edwards, and Solberg (2010) argue that preventive services are an excellent investment because they offer a good value for the system of payment and the patient. According to Schimpff (2012) the greatest opportunity to improve health outcomes among the U.S. population is found in behavioral change; such change could affect over 40 percent of our current mortality in the United States by postponing the development of chronic diseases and their complications. Personal behaviors like tobacco use, poor diet, physical inactivity, and alcohol abuse are proven contributors to many of the major chronic diseases and their subsequent complications. The National Institutes of Health (Moolgavkar et al., 2012) reports that tobacco control programs have been responsible for preventing more than 795,000 lung cancer deaths in our country from 1975 through 2000. The report goes on to say that if all cigarette smoking had ceased following the release of the first U.S. surgeon general's report on smoking and health in 1964, a total of 2.5 million people would have been spared death due to lung cancer. (This report deals only with lives saved and with not health care expenses averted.) This is only one of many examples of the value of well-developed, implemented, and evaluated health promotion programs, a value that can be achieved at very low cost. At the same time, the Nation's Health (Johnson, 2012) reports that “after years of progress, declines in preventing America's teens and young adults from using tobacco products have stalled, according to a new U.S. surgeon general's report on preventing tobacco use among youth” (p. 10). Indeed, tobacco use among youth is at epidemic status, with 3.6 million U.S. teens smoking cigarettes. This indicates a continuing need for tobacco control programs.

There has always been an interest among many people in the United States in the prevention of health problems. This interest is evident when we look at the strong support for the elimination of childhood diseases through the funding of vaccine development and the distribution of vaccines by public health departments. Unfortunately, there has been a reluctance to move past children and young adults with well-developed disease prevention programs for the rest of the population. The problem is that all the incentives in medicine favor a focus on illness rather than wellness. In order for wellness programs to work, they must be made as profitable as programs for treating illness. In other words, the U.S. health care system needs to begin offering incentives for wellness program initiatives.

According to physician David Agus (2011) we need to discover the value of making informed health choices. In his new book titled The End of Illness, Agus offers insight into the requirements necessary to lead a long life free of illness. Wellness is a gift most of us are given at birth, but many of us allow it to be taken away by poor health decisions as we age. These decisions result in our using tobacco, consuming a poor diet, and leading a sedentary life. Any good intentions we have tend to be frustrated by the multitude of negative health influencers that we encounter every day and the relative lack of countervailing influences that promote wellness. It has become very clear that incentives to remain healthy are weak or nonexistent. If we really want to improve population health in America, we need to provide incentives for the development of healthy lifestyles. Money devoted to wellness programs must be looked at as an investment that pays dividends over the long run. These dividends come in the form of a reduction in the chronic disease epidemic leading to fewer hospitalizations, fewer medications, decreased sick days, and increased productivity at work.

The federal government, through the Department of Health and Human Services and the Centers for Disease Control and Prevention, has put forth numerous programs to help Americans develop a healthy lifestyle, most notably the Healthy People initiative. The Healthy People initiative began in 1979 as the result of the publication of The Surgeon General's Report on Health Promotion and Disease Prevention. This report started a national discussion on the relationship of personal behaviors to the development of many serious diseases and injuries. This eventually led to the development of Healthy People objectives, which were first stated in a 1990 report, followed by similar reports in 2000 and 2010. Each science-based report lists the general health topics to be addressed over the next ten years to improve the health of all Americans, and then breaks those topics down into goals and then objectives. Every ten years a new Healthy People report outlines accomplishments along with additional topics, goals, and objectives for the health of the nation for the next ten years.

As Koh (2010) notes, Healthy People 2020 builds on past achievements and adds new, important goals that include promoting quality of life, encouraging healthy development and healthy behaviors across life stages, and creating social and physical environments that promote good health. Here are the continuing topics from 2010 and the new topics for 2020 (U.S. Department of Health and Human Services, 2014). Among other issues the new topics address the importance of understanding that individual health is directly related to the health of the community where the individual lives. Healthy People 2020 offers a vision of healthy people in healthy communities.

Healthy People 2020

The most recent report of the Healthy People initiative, setting evidence-based health goals and objectives for the next ten years.

Topic Areas for Healthy People 2010 and 2020 Goals

• Access to health services

• Arthritis, osteoporosis, and chronic back conditions

• Cancer

• Chronic kidney disease

• Diabetes

• Disability and health

• Educational and community-based programs

• Environmental health

• Family planning

• Food safety

• Health communication and health information technology

• Hearing and other sensory or communication disorders

• Heart disease and stroke


• Immunization and infectious diseases

• Injury and violence prevention

• Maternal, infant, and child health

• Medical product safety

• Mental health and mental disorders

• Nutrition and weight status

• Occupational safety and health

• Oral health

• Physical activity

• Public health infrastructure

• Respiratory diseases

• Sexually transmitted diseases

• Substance abuse

• Tobacco use

• Vision

New Topic Areas for Healthy People 2020 Goals

• Adolescent health

• Blood disorders and blood safety

• Dementias, including Alzheimer's disease

• Early and middle childhood

• Genomics

• Global health

• Health care-associated infections

• Health -related quality of life and well-being

• Lesbian, gay, bisexual, and transgender health

• Older adults

• Preparedness

• Sleep health

• Social determinants of health

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