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Four Reasons to Pay Attention to Workforce

July 01, 2007

Author: Ed O'Neil

It slips away so easily, this concern for workforce. Try to remember it is over 60% of the costs of care. Here are four big reasons not to forget.

Cost of care - Exceeding 16% of the nation's GDP, the cost of health care has become a pressing national issue. In all but three years over the past forty have health care costs increased at a rate below the national inflation rate and usually the difference in health care cost growth is measured in multiples of three to four times the rest of the economic growth. Recently, even with some moderation in health care cost increases, the rate of growth remains two to three times higher than the rest of the economy. The largest single purchaser of care, the federal government, now recognizes health care as the largest and fastest growing non-discretionary part of the federal budget as the combined federal obligation for Medicare, Medicaid and SCHIP far exceed even the cost of pensions through Social Security. On the private side, the percentage of employers who offer health insurance fell from 69% to 59% in the years 2000 through 2006, with all of the changes attributed to costs. At the individual level, the average cost of health insurance premiums for a family of four exceeds the annual full time income of a minimum wage worker by $160. Fully 16% of the population is uninsured, 45 million people, and two-thirds of them indicate that cost of the premium is the reason. International comparisons are important here as the average expenditure for health care in the Euro zone is around 9% of GDP and, of course, all of these nations provide universal insurance coverage.

The costs of care and insurance are already impacting health workforce issues. In addition to doing without insurance and, in many instances, care, a growing number of Americans are seeking alternative sources in the international market from purchasing drugs in Canada to seeking surgery in Costa Rica. In a perverse manner, because health care employment is so lucrative in the US, we import many workers including basic aides, highly trained physicians, and nurses from around the world. But domestic alternatives are also sought as price spirals up. Complimentary and alternative care continue to grow in part because they are affordable options for the uninsured and inexpensive supplements to more traditional care for those with insurance. This growth impacts the character of the demand for health care workers. Ultimately the pressure to gain some control over health care costs will move to change the complex arrangements we have devised to deliver care, altering the practice model. This move will also be fueled by the century long epidemiological shift of the health burden of the US population from acute disease to chronic disability and the corresponding shift in the response from curing to preventing and managing disease. While applauded by most professionals within health care, the accommodations which will be needed to address this shift will lead to wholesale alternations in the ways that professionals practice, the numbers of them that will be required and the ways in which they are educated and retrained. Care delivery systems which lead these innovations will initially be at higher levels of risk, but will find that their differently rationalized approaches to care will mean considerable strategic advantage as individual and corporate purchasers seek novel approaches which can deliver comparable quality at lower prices.

Access to care - Access to care is a complex issue. The principal reason for lack of access is the cost of care which drives up insurance premiums or prevents individuals themselves from being able to afford to pay for care. But access is also a function of limited forms and mechanisms for the organization of care. Rural areas suffer because the dominant model for care - physician office visits coupled with a hospital admissions - is often not sustainable in less populated areas. Inner city regions experience an absence of providers, even when payment mechanisms do exist, because the needs and cultural preferences of much of the population do not align with the dominant model for organizing and delivering care services. In a more general way, the growing chronic care needs of the population are not well served by the vestiges of a system designed to treat populations with episodic infectious disorders.

As the nation seeks to provide culturally competent care services to the uninsured and under served and recognizes that it cannot afford to pay for an expensive acute care delivery system, it will inevitably need to address the ways in which some care services are structured and delivered. Early signs of this process are innovations such as group visits, new forms of home care, substitution of various professionals, technologies and self care, and a broader array of consumer choices. This will mean that new types of health professional workers will be needed, that even professionals trained in traditional fields will need new skills and expectations of practice, and many of those currently in practice will need a similar set of skills and preferences.

Quality of care - Very few movements in health care today go forward without some attention being paid to the need to improve quality. The numbers are large and familiar to the point of being numbing. But whether the number of avoidable deaths is 100,000 or half that, within health care from provider to purchaser to policy maker, everyone seems to be on the quality point. Only the consumer seems to be left out of this equation as their concerns for cost and access almost always trump the quality issue. Regardless, the discontinuities of utilization, outcomes, practice patterns, and practice models have and will continue to create disequilibria which will be an independent driver of change. The quality movement has also led to a rapid increase in the collection and use of metrics to assess efficacy and safety of practice. These data also create the empirical case for substitution, in which cost can remain the same and quality can improve, cost can be reduced and quality can remain the same, or the grail like quest for a lower cost but higher quality mechanism for care delivery.

This dynamic will mean greater acceptance for new care models, their impact on professional practice, and the skills of both clinical and non-clinical personnel involved in delivering a unit of care. One of the great impediments for such changes is the practice acts that regulate professional practice at the state level. By demonstrating that alternative uses of resources can produce safer environments with higher quality outcomes, new constituencies for changing these laws will arise.

Technology - In other sectors of the economy, technology is unrivaled in its capacity to change workforce demand and supply. Its impact in health care is blunted somewhat by professional practice regulations and their control of the system that allows the technology to enter into use, but controls its impact on employment and practice prerogatives. This form of arrangements means that rather than making health care more efficient and more widely available, technology tends to be the biggest driver of health care costs. And there is much technology yet to be deployed in health care. Information and communications technology has remade virtually every workplace in America but still drags woefully behind in health care. There are significant efforts now to catch up, which will lead to considerable displacement of many health care workers. Non-clinical entry level administrative workers may be particularly affected as the cost of managing information leads to capital investments in systems. Beyond the information technology revolution, the biomedical technology revolution is just now emerging, produced by the annual $32 billion public investment in biomedical research which is doubled and matched by the private sector. Eventually great marvels of regeneration are promised by these payments, but for the short run they will drive costs.

These technological changes will drive workforce concerns as the technology becomes available in ways that can assist with reshaping practice models, expanding access and demonstrating a capacity to hold or lower costs. In the short term, IT investments will strip capital from other workforce investments and displace a certain category of workers. In the long run, it will make information more widely available to patients and other providers, lowering the demand for some types of specialized knowledge which currently reside only in individuals. Biotechnology today offers expensive biologics which can cost in excess of $50,000 for a single regimen of cancer care. But as they are made more effective and can be targeted to more individuals, the cost will go down and efficacy will increase. At that point treatment or prevention at $50,000 or even twice that amount becomes a better system choice when compared to more conventional costs of surgery, hospital care, and outpatient chemotherapy. The professionals and facilities needed for one course of care are radically different from those needed for another. However, perhaps the real workforce impact will come as information technology morphs into biomedical technology, creating a new form of care management technology which will allow patients and professionals real time access to clinical data monitored directly in the body and sent to expert systems for assessment. Such developments could mean lower demand for providers, less sophisticated skills by many direct care givers as they are backed up by smart systems, and more care provided directly by the patient themselves. Because the costs of care are so great in the US, the development of these systems will attract the considerable amounts of capital they will need for development.

 

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