Health care has emerged as one of the primary areas of focus for the new administration. In this space over the past few months, I have offered arguments as to why this is essential. First, there can be no long term economic recovery in this nation unless we get a handle on the runaway costs associated with our health care system. Our annual over-expenditure on health care now approaches $800 billion dollars. Put another way, we would save about $800 billion annually if we outsourced health care for every American to Norway. Second, the cost of care limits access, as does the structure of our health care system. The current economic recession threatens to provide numerous examples of how vulnerable we are to the loss of health care access, because health insurance in the US is largely tied to employment for those under age 65. Finally, while the US approach offers some of the most sophisticated and highest quality care in the world, the system is also characterized by considerable disparities in access, quality and outcomes. Given what we spend on health care and what we know about improving the quality of care, none of this is necessary. But based on our current reality, how do we develop a health care system that meets our health care needs at a cost we can afford?
Changing health care in the US will be one of the greatest change management processes ever undertaken because of the lack of connectedness in our system and the self-interests of the incumbents. Each of these features of our health care system needs to be addressed during the change process. Let’s looks at each one separately.
The self-interests should be obvious to everyone, except those that are served by the current arrangements. I have rarely met anyone in health care who does not favor the improvement of health care services for the patient or the public at large. Unfortunately, the tradition of health care in the US has given the power to structure our system almost exclusively to health care professionals and institutional leaders. This has created a moral hazard because personal perspectives and interest are difficult for most to overcome. The process of creating a system that serves the needs of consumers and the public has been, and continues to be, further confounded by economic disincentives to move beyond the status quo. In every other segment of our society we have market or policy/political mechanisms to signal institutions as to what aims they should pursue. If they fail to act correctly they suffer the consequences. But development of our health care system has relied on the uninformed actions of incumbents in the system. Left to their own devices, they have built a system that costs one-third more than those of any other nation, underperforms in terms of quality, safety and consumer satisfaction, excludes about 45 million people, and in an ironic twist, fails to satisfy the very incumbents that have created it. The perspectives of incumbents will need to change before there can be any real change to the system. The pathway to this is a systematic and sustained effort to appeal to the instinct to serve the patient and to a lesser extent the public. Ultimately, however, disincentives for continuing business as usual and incentives for moving on to a new pathway will be necessary. Of all the challenges involved in changing health care, these shifts will require the greatest political courage.
The realignment of incentives is a first essential step for effective change. But without new linkages across professions and institutions, new incentives may lead to efforts to game the system rather than to improve its performance. There are currently many barriers, other than ability to pay, preventing effective action from emerging. These barriers include professional interests, lack of shared vocabulary, lack of shared goals and methods, and institutional policies, just to name a few. The barriers manifest themselves in conflicts between nurse and physician, in-patient and out-patient, prevention and treatment, and specialty care and general care. When services or goods pass from one seller to another seller, or from seller to end buyer, the costs associated with making these exchanges are called transaction costs. A major business strategy over the past few decades has been to use new technology and worker training to reduce transaction costs.
Transactions between seller and buyer also present essential opportunities for sellers to provide quality services that distinguish them from competitors. Unfortunately, health care transactions tend to be neither efficient nor of high quality. We are so inefficient and thoughtless of quality that even token efforts at providing it distinguish professionals and institutions from one another. Recently, a family member was unable to get a specialty consult in an in-patient setting at a premier hospital. He was advised to check out, go back to another facility and return to the emergency department of the same hospital in order to get the specialty care needed. The strategy worked, but maybe there are better, more efficient and humane ways to provide access to needed specialty care. Improved linkages of processes within and between institutions must start within existing institutions.
There is certainly enough work to do. The concept of patient-centered care has been around for the better part of two decades, but the lack of commitment to this unifying concept underlies a shameful reality that keeps professionals and institutions from providing quality care to their patients and ensuring their own long-term survival.
Linkages around a common professional practice or institutional vision will be challenging enough, but ultimately the nation also needs alignment of all health care work to meet broadly defined public needs. Today we bundle services according to the preferences of professionals and institutions. As they maximize their economic position, patients make demands, often on the basis of payment options rather than health care information or decision tools. This process leads to underinvestment in prevention and management of health care and overinvestment in diagnosis and treatment. To move to a different alignment the nation needs a new way to generate health care aims, set goals, measure progress, check satisfaction and re-do work as needed. As a people we will reject such alignment set at the federal level, regardless of how efficient or fair such an effort might be. Some states are small enough to do this within their entire boundaries, but most will need a sub-state region in order to create a manageable framework for such an undertaking. This will require a different type of investment by the public, less as patients and more as informed consumers actively involved in health care. This is where we need truly new ideas about how the public can be engaged in the entire range of health care activities.
We need a new approach to health care, fixing up what we have won’t get it done. Realigning the incentives, fixing the linkages and building new ways to imagine health are the keys to the process.