Major Challenges Facing Health Care Delivery

There are numerous short-term and long-term health challenges facing the United States as it confronts an unsustainable escalation in the costs associated with funding the health care sector of the economy. It helps us to better understand the challenges and concentrate on better solutions when we realize that rising costs in health care are only symptoms of much larger problems. The challenges discussed in this section will require innovative approaches developed by the individuals who currently produce and consume health services. It is ironic that although these solutions are not going to come from government, they will not be able to happen without the help of government. Unfortunately, many of the challenges have actually been caused by government intervention in the health care sector. These challenges comprise physician shortages, lack of health care quality, the chronic disease epidemic, the high cost of pharmaceuticals, medical errors and medical malpractice, and fraud and waste.

Physician Shortages

U.S. legislators have attempted to deal with the escalating costs of health care delivery by opting to cut the salaries of those who make up the most important component of health care delivery, the physicians. Our country is currently experiencing a shortage of primary care physicians that could very easily become a shortage of medical specialists as well if we continue to cut their reimbursement rates. A side effect of reducing physician reimbursement is that many physicians are refusing to accept Medicaid recipients because the government reimbursement rate is too low. Making matters worse is the fact that the ACA will add millions of individuals to the Medicaid program, but the physician shortage may deny them access. They will have insurance coverage but not necessarily providers of health care (Lowrey & Pear, 2012).

The Association of Medical Colleges is predicting a shortage of more than 62,000 physicians by the year 2015. As a result, health economists predict that the price of health care will escalate at a much greater rate than we have previously seen or wait time for appointments will increase or both. Providing incentives to medical students who choose to work in primary care can reverse this shortage of primary care physicians. There also needs to be a commitment to legislation designed to free physicians from redundant paperwork and to allow physician extenders to perform more of the less skilled duties of physicians. The new health care law is actually replacing price rationing in health care with time rationing. As millions of Americans are added to the insured rolls because of the ACA, people will find it more difficult to get a physician appointment because of the shortages of providers. This shortage will result from increased demand for health services while the number of physicians diminishes.

Lack of Health Care Quality

Another concern of health policy experts is the lack of quality in the health care being supplied to consumers. This poor quality has been demonstrated by comparing the United States to other countries on many key health indices, such as infant mortality rate, length of life, quality of life as people age, and number of medical errors and nosocomial infections. The starting point for quality improvement in health care delivery is the development of a definition of what improved quality means to consumers.

There is an old adage that tells us, “You get what you pay for.” That statement seems to be true everywhere except when we are purchasing health care services. Our country spends twice as much as other industrialized countries with far lower returns for our money in terms of improved health indices. Perednia (2011) argues that a large portion of what we spend on health care is wasted on things like redundant paperwork and other administrative costs that do nothing to improve individual or population health. According to Langley et al. (2009), “Fundamental changes that result in improvement in quality include

• Altering how work or activity is done or the makeup of a product

• Producing visible, positive differences in results relative to historical norms

• Having a lasting impact” [p. 16]

In order to enhance health care quality we must first determine what it is that requires improvement, develop a process for advancement, and then evaluate the success or failure of the process. We also need to offer the necessary incentives to improve the quality of health care services. These incentives can include paying physicians for performance, especially when the performance includes health education for the patient and his or her family members. As mentioned previously, health education that leads to prevention is the only way to deal effectively with chronic diseases and their complications because these diseases cannot be cured. One of the most important things a physician can do for his or her patients and our health care system is to help those patients prevent disease. This type of intervention needs to be looked at as a long-term investment.

The Chronic Disease Epidemic

The chronic disease epidemic is growing rapidly in our country. It is fueled in no small part by the rise in obesity and is considered by most physicians and public health officials as the greatest medical threat to confront our system of medical care. These diseases cannot be allowed to continue to increase in incidence and prevalence or our health care system is indeed doomed to failure because these chronic diseases cannot be cured and the costs of their complications continue to grow as our nation ages. According to Schimpff (2012) this epidemic offers the United States an opportunity to improve population health by focusing on personal behaviors that are detrimental to health. This will require our health care system to shift resources away from the cure of disease and toward prevention efforts such as health education. Health education efforts need to begin in elementary school and continue on into the workplace.

According to Ogden, Carroll, Kit, and Fiegal (2012), more than one- third of adults and almost 17 percent of youth were obese in 2009 and 2010. This epidemic of obesity is growing at a rapid pace among children aged two to nineteen, claiming 5 million girls and approximately 7 million boys. This escalation in obesity at such a young age is going to result in early onset of chronic diseases like type 2 diabetes, resulting in life-threatening complications in these individuals' prime of life during their working age. It is extremely important to understand that we as a nation cannot sit back and allow this epidemic to slowly consume our young and our old. We have to take action against this chronic disease epidemic now because we are running out of time.

Along with the obesity problem (Figure 15.1), physical inactivity among the population (Figure 15.2) is also responsible for premature death and disability in epidemic proportions. According to The Nation's Health (Curry, 2012), physical inactivity results in about one in ten deaths worldwide and causes up to 10 percent of four chronic diseases: coronary heart disease, type 2 diabetes, breast cancer, and colon cancer. The epidemic of

Prevalence of Obesity Among Adults Aged Twenty and over, by Sex and Age: United States, 2009-2010

Figure 15.1 Prevalence of Obesity Among Adults Aged Twenty and over, by Sex and Age: United States, 2009-2010

Note: Estimates were age adjusted by the direct method to the 2000 U.S. Census population using the age groups 20-39,40-59, and 60 and over.

1 Significant increasing lineartrend by age (p < 0.01).

2 Significant increasing lineartrend by age (p < 0.001).

Source: Ogden et at, 2012, fig. 1. Data from National Center for Health Statistic, National Health and Nutrition Examination Survey, 2009-2010.

Percentage of Adults Aged Eighteen and over Who Met the 2008 federal Physical Activity Guidelines for Aerobic Activity Through Leisure-Time Aerobic Activity: United States, 1997-September 2011

Figure 15.2 Percentage of Adults Aged Eighteen and over Who Met the 2008 federal Physical Activity Guidelines for Aerobic Activity Through Leisure-Time Aerobic Activity: United States, 1997-September 2011

chronic diseases and their complications is going to continue growing and consuming increasing amounts of scarce resources unless we as a nation make the decision to prevent chronic diseases and their complications from occurring in the first place.

According to Marvassi and Stafford (2012), many modifiable risk factors for the development of chronic diseases are being ignored by the current U.S. medical care delivery system. These authors discuss Fries's morbidity compression model, which deals with the possibility of extending an individual's disease-free lifespan. Fries's model suggests that an individual's age at the onset of his or her first chronic infirmity can be postponed more readily than his or her age of death. If this is so, then the lifetime illness burden could be compressed into a shorter period of time nearer to the age of death. If we could postpone the complications from chronic diseases to a limited time period right before death, then we could reduce health care costs and improve the lives of patients at the same time. This change will require the reconnecting of medicine to public health departments and the use of primary care physicians.

morbidity compression

A reduction of the lifetime illness burden through postponing the onset of health complications from chronic diseases.

The High Cost of Pharmaceuticals

Pharmaceuticals are a for-profit component of the U.S. health care system; they cost approximately 10 percent of the more than $2 trillion a year spent on the health sector of our economy. The drug industry produces one of the highest profit levels on an annual basis of all American industries. In fact, until 2006, it was the most profitable industry in our country. It has since dropped to third place, but profit is still the ruler of the research agenda for the drug industry.

The pharmaceutical industry has developed solutions to many of the major threats to our health; it has discovered medicines that can mediate or cure many of the leading causes of disease. In order to increase research for new treatments for disease and because the drug industry reports that it costs between $800 million and $2 billion to bring each new drug to market, the FDA grants drug companies twenty-year patent protection for each new research discovery. This costs claim is refuted by Washington (2011), who cites a study completed by the U.S. government revealing that to bring a new drug to market takes only ten to twelve years at an average cost of only $359 million. Washington also points out that medical research has actually been harmed as pharmaceutical companies instruct their paid researchers to withhold damaging data from studies and hire ghostwriters to package their marketing messages as scientific studies.

The continuous increases in the prices of necessary drugs for treatment of medical conditions are not sustainable in the long term. At the same time, we desperately need continued research and development on new drugs to treat the leading causes of morbidity, mortality, and disability found in our country today. These innovations will come only from investment by government, academia, and pharmaceutical companies looking to make a profit. According to Christensen, Grossman, and Hwang (2009), the pharmaceutical industry is ripe for disruptive innovation and that process has already begun. As discussed in Chapter Thirteen, these authors argue that a disruptive innovation represents the application of a new set of values in the production process, with results that overtake the existing market. This type of innovation makes products or services less expensive and more accessible, allowing more consumers to enter and make purchases in the disrupted market. An innovation that is disruptive gives a whole new population of consumers at the bottom of a market access to a product or service that was historically accessible only to consumers with a lot of money or a lot of skill. To some extent, disruptive innovation in pharmaceuticals is a result of the pharmaceutical leaders attempting to further increase their enormous profits by abandoning the least profitable of their activities. Disruptive firms are taking over these less profitable activities and turning them into value-added activities for the health care sector. This is allowing new entrants into the drug-producing industry, which was becoming monopolized by a few large firms. These hungry entrepreneurs may ultimately discover new cures for diseases that were previously unprofitable ventures for the large firms.

disruptive innovation

A new product or service that is capable of changing an existing market by improving convenience, access, and/or affordability.

Medical Errors and Malpractice

Another major problem found in health care is the danger that patients face on a daily basis when they enter the health care system for assistance with their medical problems. Goodman (2012) points out that “as many as 187,000 patients die every year for some reason other than the medical condition that caused them to seek care. By another estimate, there are 6.1 million injuries caused by the healthcare system, including hospital- acquired infections that afflict one in every twenty hospital patients” (p. 95).

The United States is in the middle of a dangerous epidemic of medical errors, some of them arising from providing too much health care. Recall that the Institute of Medicine (IOM) (1999) defines a medical error as “the failure of a planned action to be completed as intended or the use of a wrong plan to achieve an aim.” It seems that entering the medical care system, especially being admitted to a hospital, has become a potentially dangerous event Brownlee (2007) points out that the most common medical error found in the delivery of medical care today is erroneous or inaccurate drug administration. These errors can be reduced only by better leadership along with empowered followers who are all working as a team to, first, discover why medical errors occur and, second, to rapidly move to prevent them from occurring in the future. This goal of reduced medical errors has been achieved by numerous health care facilities but has had its greatest success in the U.S. Department of Veterans Affairs (VA) hospitals. According to Longman (2012) the real cause of medical errors in health care facilities is the lack of a system designed to prevent these errors from ever occurring in the first place. Fortunately, the Veterans Health Administration (VHA), which runs the numerous VA hospitals for veterans, decided to do something about this epidemic of medical errors.

medical error

The failure of a planned action to be completed as intended or the use of a wrong plan to achieve an aim.

The starting point was the development of a way to gain full disclosure from all hospitals in the VA system regarding every single medical error. This was a very dangerous procedure to develop of course, because it meant that everyone, and especially the news media, would become a witness to medical errors among U.S. veterans. But it had to be done in order to gain an understanding of the volume of errors, their location, and their cause.

These error reports included operating on the wrong patient, operating on the wrong part of the body, medication errors, abuse, and even deaths during the delivery of medical care.

The next step involved discovering ways to prevent errors from happening. A checklist system was developed by the VHA, so that each medical procedure had a checklist that included all the necessary steps in the procedure. The VHA then began using the medical bracelet worn by each patient as an electronic storage system for information about the patient's prescribed drugs. A computer software program was written and used to record virtually every piece of medical information regarding every patient hospitalized in the VA hospital system. The VA became a shinning star in our nation's war on the epidemic of medical errors.

Fraud and Waste

The amount of fraud and waste in the U.S. health care delivery system has risen to historic levels and has become one of the most important challenges facing our nation. If our country were able to deal with this one area successfully, we could easily reverse the problem of escalating health care costs. A recent study conducted by the IOM (2013) found that the U.S. health care system wastes over $750 billion annually; that is enough money to fund Medicare and Medicaid into the distant future. According to the study report, this waste represents about thirty cents of every health care dollar, and immediate action to eliminate the waste is required.

The report identified six areas of waste: $210 billion in unnecessary services, $130 billion in inefficiency in the delivery of care, $190 billion in excess administration costs, $105 billion in inflated prices, $55 billion in prevention failures, and $75 billion in fraud. This report also offers a road map for finding the major areas of waste and fraud in our health care system, along with ten recommendations for ways to eliminate the waste and improve health care delivery for all. The most important recommendations are payment reforms that would reward quality, improved coordination of care, increased patient education, and better utilization of technology to aid in the improvement of clinical decision making.

An example of the seriousness of the fraud issue was brought to national attention by an investigation reported by the New York Times. According to Pear (2008), in the time period 2000 to 2007, Medicare paid 478,500 claims totaling $60 million to $92 million that were submitted by deceased physicians. As Hayes (2012) observes, the presence of large amounts of money has the ability to change individual and group behavior so that people participate in behavior they would usually avoid. Hayes also argues that reduced regulatory oversight and a culture of corruption are usually elements in successful attempts at fraud by both individuals and organizations. Fraud can also result from moral hazard. As discussed in Chapter Six, moral hazard refers to the perverse incentives that result when individuals are insulated from the costs associated with their actions. Many individuals involved in health care fraud seem to believe that they are just getting back what is owed them but not received because of government reductions in reimbursement.

An informative example of serious organizational fraud was investigated and reported by the New York Times in August 2012. The investigation centered on performing unnecessary cardiac work. It found that some cardiologists in Florida hospitals owned by HCA, the largest for-profit hospital chain in the United States, were unable to justify many of the procedures they were performing. In fact fully half of the cardiac catheterizations completed at Lawnwood Regional Medical Center in Fort Pierce, Florida, were performed on patients without significant heart disease (Abelson & Creswell, 2012).

Unfortunately, this type of fraud is widespread in health care, and up until now not a great deal has been done to eliminate fraud and abuse of our limited health care resources. To reduce fraud and waste in health care delivery we need to invest in the investigation of fraud and waste, set regulations, and prosecute offenders. We also need a rigorous evaluation of the costs and benefits associated with medical testing, procedures, and treatment of medical conditions. Better investigation and prosecution makes more sense than simply increasing premiums to make up for this illegal activity.

Accountable Care Organizations

The concept of the accountable care organization (ACO) was given birth in 2006 by Elliot Fisher, who was the director of the Center for Health Policy Research at Dartmouth Medical School. The ACO, which looks a lot like a health maintenance organization (HMO), is a health care organization designed to link payment and delivery of health care services to improved quality and cost reduction for a certain population. This new concept has gained traction among policy experts and is included in the new health care reform legislation. In an ACO various health care organizations, practices, and people – such as primary care physicians, specialists, hospitals, other providers, and payers – work together to provide and manage care. ACOs emphasize the alignment of incentives and accountability for providers across the continuum of care. Compared to HMOs, these new organizations will require greater use of information technology along with financial incentives in order to accomplish their goals.

accountable care organization (ACO)

A group of physicians and hospitals that share responsibility for the health and cost of care of a defined group of patients, with a goal of improving patient health while lowering cost of care.

On the one hand Starr (2011) points out that the ACO offers an attempt at experimentation that may lead to better ways to reduce the costs of health care delivery while improving the quality of health services. On the other hand Goodman (2012) is concerned that ACO incentives to providers may result in less care, which may actually harm the patient's health. Other possible problems with this care model are patients' limited choices of physicians and the possibility that patients may not see the same physician at each appointment.

According to Fisher et al. (2009), in order to improve the value of health care we need to deal with three barriers: “lack of accountability for the overall quality and cost of care and for decisions about local capacity; a payment system that rewards volume, growth, and intensity, regardless of value (and that penalizes providers who adopt cost-saving innovations); and the widespread belief – often in the face of relevant evidence to the contrary – that more medical care means better medical care” (p. 220). These barriers to the achievement of better value health care for the population are formidable, but they can be overcome with creativity and innovation in the delivery of health care.

To improve the quality of health care services, we need a primary care approach that uses a team model that coordinates medical care across time and various settings. For example, Shortell (2010) argues that the ACO model is particularly capable of serving the chronically ill cohort, where many patients have more than one chronic illness and are seen by multiple specialists. The goal for these patients should be to avoid the complications from their chronic diseases entirely. At the same time, Estes, Chapman, Dodd, Hollister, and Harrington (2013) observe that the current health care reform efforts are going to result in continuing power struggles between those who favor an approach of individual responsibility and those who see a role for government intervention in the workings of our health care system.

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