What Can We Do to Forestall the Impending Train Wreck of U.S. Health Care?
The U.S. health care system is a mess.
It is unfathomably complicated, far too expensive, and delivers results that used to be generally good, at least for wealthier white people. I say “used to be” because average life expectancy dropped by almost three full years from 2019 to 2021 — and varies greatly between states.
The most long-lived are Hawaiians (about 9 years longer than Mississippians at the other end of the scale). Results are not so good for poorer and non-white people. For example, more than twice as many Black babies die before their first birthday than non-Hispanic white babies, according to the Centers for Disease Control.
Massive consolidation among hospitals and health systems continues, and despite the consolidators’ claims that this will lead to more efficiency, reality is quite different.
Unlike in the real world where consolidation leads to greater efficiency, lower cost and better quality, health system consolidation has led to higher prices — while more hospitals are closing or drastically cutting services, especially in already underserved rural areas, leaving health care “deserts” behind.
Consolidation has also failed to produce any discernible improvement in health care quality. If anything, there’s credible evidence that lower health care quality is associated with more concentrated health care markets.
To be sure, some hospitals are efficient — defined as delivering excellent care at relatively low cost — while others are quite inefficient — high cost, not great care. The reality is that for hospital care, cost ≠ quality, and quality does not cost more.
The Lown Institute has done some great research on this and identified the nation’s 10 most efficient hospitals — the criterion being how much Medicare was charged compared to how many patients died 30 and 90 days from admission. OK, that isn’t by any stretch a comprehensive definition, but the results were revealing.
Costs at hospitals with average 30-day mortality rates ranged from $9,000 to $27,000 per patient … but if all hospitals operated as efficiently as the top 10, costs would be much closer to that $9,000 figure, and we taxpayers would save $8 billion each year.
Meanwhile, for-profit health care systems and health insurers and a few not-for-profits are reporting robust operating margins despite paying health care providers more than twice what Medicare does. Yes, the Feds can exert pricing power — but United Healthcare or Aetna, Blue Cross or Centene … can’t?
Those health care giants should be able to negotiate better deals with providers; they have massive buying power and millions of members to leverage. They should be able to use that power to give you lower insurance costs — but they can’t — or perhaps more cynically, won’t.
Those private insurers are (theoretically) more nimble, smarter, better run, and more efficient than the government. And they have hundreds of billions of health care dollars to leverage … United Healthcare’s annual revenues alone will top $320 billion this year.
Yet they’ve failed to outperform a bunch of bureaucrats … or maybe they haven’t wanted to. Health care inflation leads to higher annual revenues for health plans, and higher medical costs allow those health plans to charge higher administrative fees.
Then there’s the primary care problem. Simply stated, good primary care is wildly undervalued or appreciated, because primary care doesn’t make money for anyone, especially primary care providers.
Which makes no sense on every front but the profit one. If everyone had good primary care:
- They’d be healthier.
- Their health risks would be identified early and a plan would be developed to address them.
- They’d have a provider who treats them as a whole person, who understands that we are a bunch of tightly-interrelated organ systems that have to be considered as a whole, not as individual organs.
- They’d understand non-physical issues can be just as impactful as physical ones.
- There’d be a lot less need for specialists.
- Health care costs would likely be a lot lower.
Healthier people don’t need as many medications, devices, treatments, injections, therapies, surgeries, rehab, inpatient beds or surgical centers as unhealthy people. Unhealthy people need more — and that care has to be delivered by highly trained people.
Today, one out of five hospitals is critically under-staffed, the result of staff burnout, increasing frustration and intolerable working conditions. Over the last 2 years the nation has lost more than 10,000 staffed ICU beds.
The combination of a flood of COVID patients, worsening work conditions, increasing violence and staff losses from resignation and COVID quarantine is exacerbating the staffing crisis and affecting all patients. From 2020 to 2021, over 100,000 nurses left the workforce; staff turnover runs from 1 in 11 at top-performing facilities to more than 1 in 3 at facilities with the highest turnover rate.
As a result, staff nurses making $40-$45 an hour are training and then working alongside traveling nurses with less experience who are earning $60 and up an hour. Some hospitals are using ED physicians to staff the charge nurse function at emergency departments because they’re cheaper than travelers.
Pressed to the limit by COVID, many hospitals required nurses and other clinical and support staff to use their own PTO if they contracted COVID and made them come back to work in 5 days instead of two weeks. Hardly the policies, practices and statements that will engender loyalty and strengthen commitment among health care staff.
Retention bonuses, day-care assistance, hazardous duty pay are among the measures smart administrators should be taking. Alas few are.
It’s not as if administrators have many other options. They are beyond swamped, scrambling to find enough people to fill the next shift, unable to plan much beyond that. With more and more nurses and other staff quitting, that task will just get harder and harder.
Staffing problems aren’t limited to nursing, as private equity firms buy up anesthesiology, emergency, orthopedic and other medical groups. Research published by the National Institute of Health Care Management found the “Acquisition of independent physician practices by private equity may be associated with the reduction of physician competition and increased prices.”
Therein lies a most confounding question; the profit motive inherent in the U.S. health care system has huge and often quite negative ramifications for our health and the cost of health care. Yet to date, attempts to transform our fee-for-service system to “value based care” has been relatively ineffective.
Cost reductions have averaged the low- to mid-single digits, and adoption has been spotty at best.
The net is the U.S. health care system is stupid expensive, delivers generally good care for people with private or governmental insurance, and is increasingly hard to access for folks in rural communities or inner cities.
It is also a major drag on our economy; our costs are twice the average industrialized country’s with outcomes generally lagging behind the average. Those dollars aren’t going to R&D, wages, infrastructure or education.
Trends will continue until they are no longer sustainable. While no one knows when we will hit that point, we all know we are headed in that direction, and going fast. &