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Health Care Environment Drivers

March 01, 2011

Author: Ed O'Neil

The Center for the Health Professions sponsors a large number of leadership development programs in health care. An essential part of these programs is to help participants understand the changing environment, and to assist them in developing responses so that their organizations can be strategically successful. I am frequently asked by my colleagues if there was a single, short document that summarizes that changing environment facing all of health care. There isn't, so I'm taking this opportunity to try to remedy that situation. What follows is my list of some of the most critical issues, developments, and concerns in the health care environment now and in the future. Grasping them from the perspective of your practice, hospital, clinic, group, school, company or agency will be an essential first step in being a transformational leader.

Cost - The cost to provide health care in the U.S. reached 17.6% of Gross Domestic Product in 2009 for a total expenditure of $2.5 trillion, or $8,086 per person. The rate of growth slowed from 2008 to 2009, but probably as a function of a slowing economy, not cost saving measures. By any measure, we have the most expensive health care system in the world. If we average the cost of the three most expensive European systems, we spend about one-third more than they do. For 2009, that represents over $800 billion dollars annually. Costs of these magnitudes cripple the nation's global competiveness, destroy jobs, indebt the nation and states, bankrupt individuals and are simply not sustainable.

Demography - Three large demographic issues will dominate health care over the next few decades. Most dramatic will be the aging of the population. Over 40 million Americans were over 65 in 2010, about 13% of the population. As the baby boom ages, this over 65 population will grow steadily to midcentury, cresting at over 20% of the total. Obviously, this age group consumes more health care and will continue as it grows and as more people reach an older age. The population is also returning to a diversity seen last in the early twentieth century. By mid-century the population will be about 30% Hispanic, 13 % Black, 8% Asian and about two-third non-Hispanic White. Perhaps more importantly race, ethnicity and nationality seem to be less important for individual identity, but still are a significant factor for health outcomes and access to care. The often missed demographic change will be growth. At 310 million in 2010, the population will grow by 15% to 357 million by 2025, and by over 40% exceeding 439 million by 2050. As the population ages, changes and grows, it will inevitably demand more and differently skilled workers.

Quality - For many years, most Americans assumed that the quality of their health care was outstanding and unrivaled in the world. While other nations may not be any better, there has been a growing chorus for over a decade that there are serious and systemic issues with both the quality and safety of health care in the U.S. While hospital care has been the focus of much of the attention, there are issues across the continuum of care and in all populations, leading one important assessment to conclude that "there are large gaps between the care people should receive and the care they do receive." A considerable portion of this poor quality seems to stem from variation in practice that leads to over and under treatment, use of outdated interventions and differences in individual, professional and institutional practices that are not tied to evidence. Moreover there seems to be an inverse relationship between expenditures for care and the quality of the outcomes of that care. Now and into the future, care systems and providers will need to provide safety and quality performance data on both the process and increasingly on the outcomes of their work.

Epidemiology - One of the great success stories of twentieth century health care in the U.S. and the west in general has been thirty or so years that were added to life expectancy. The majority of this improvement attributed more to public health measures than to interventional medicine. As the population has aged, the disease burden of the nations has shifted from acute infections to chronic disease and disability. However, a host of factors from the changing environment to iatrogenic insults have led to a reemergence of infectious disease as an important threat to the population's health. One of the significant imbalances in U.S. health care is the use of expensive acute care institutions like hospitals to manage the chronicity of an aging population.

Consumer - One of the distinguishing characteristics of modern American health care is the separation of the patient/consumer from the processes and financing of care services. This segregation has had a deleterious effect on the physical health of individuals and the fiscal health of the nation. A significant part of the Patient Protection and Affordable Care Act {P.L. 111-148} is to empower every health care consumer with insurance coverage and to improve the information available for choice and decision making. The progress toward purely consumer driven health care, while ideological attractive to some, has encountered a different reality in real markets and with individual decision making. Movement toward a reformed system of care will increasingly be driven by informed consumers making choices at both the plan and provider levels, with corresponding economic enforcements driving the decisions.

Technology - Most aspects of modern life in the U.S. have been impacted by the proliferation of information and communications technology over the past three decades. From work to education and human interaction, the reach of the myriad technologies have increased the volume of information that is available, how it is shaped, understood and deployed, and how individuals and organizations interact. Health care has been woefully behind in adapting this technology and having it drive reorganization and reform. There are three ways that this technology can and will change health care. As the sixth largest economic undertaking in the world, health care is replete with countless administrative processes that, given the nature of the work, demand a high level of reliability. Automation of these processes, particularly when they occur within integrated systems, is the only way to achieve inexpensive, highly reliable exchanges of information ranging from the purely administrative to clinical records. Not surprisingly, this use of health IT is occurring first. Secondly, the process of clinical decision making and support is improved dramatically as clinicians and consumers have access to new information tools and supports. This includes the movement of more traditional provider- patient interactions into new media and technology. As these tools first need to be developed and then accepted by professionals and patients, this part of the transition will lag behind the more purely administrative. Finally, the real revolution in health care IT will come with the full recognition that health care is essentially a knowledge based business, and that knowledge widely and freely available to end users, the patient/consumer, will have profound impact on issues of cost, efficacy, quality and access. The Patient Protection and Affordable Care Act of 2010 and more importantly the American Recovery and Reinvestment Act a year earlier, provide direction, measurement and finance to assist in this movement.

Combined in a highly interactive manner, these drivers in both the policy and market realms will move health care in the coming decade and a half. Every practice, organization, company and profession will need to re-imagine itself in the context of this shifting landscape.

 

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