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Report looks at state of U.S. healthcare, finds many challenges

Wednesday November 13, 2013
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An examination of healthcare in the U.S. finds that despite the extraordinary economic success of many of its participants, the healthcare system has performed relatively poorly by some measures.

Furthermore, outcomes have improved, but more slowly than in the past and more slowly than in comparable countries, according to an article published in the Nov. 13 issue of the Journal of the American Medical Association and presented Nov. 12 at the National Press Club in Washington, D.C.

Hamilton Moses III, MD, of the Alerion Institute, North Garden, Va., and the Johns Hopkins School of Medicine, Baltimore, and colleagues from The Boston Consulting Group and University of Rochester (N.Y.), using publicly available data, conducted an analysis to identify trends in healthcare, principally from 1980 to 2011.

The areas they addressed included the economics of healthcare; the profiles of people who receive care and of organizations that provide care; and the value created in terms of objective health outcomes and perceptions of quality of care. In addition, they examined the potential factors driving change, including consolidation of insurers and health systems, healthcare information and the patient as consumer.

Economics and outcomes

In 2011, U.S. healthcare employed 15.7% (21 million people) of the workforce, with expenditures of $2.7 trillion, doubling since 1980 as a percentage of U.S. gross domestic product to 17.9%.

Between 2000 and 2010, healthcare increased faster than any other private industry (2.9% a year). Government funding of healthcare increased from 31% in 1980 to 42% in 2011. Costs have tripled in real terms over the past two decades. However, the average rate of increase has declined consistently since the mid-1970s and sharply over the last decade.

Despite the increases in resources devoted to healthcare, multiple health metrics, including life expectancy at birth and survival with many diseases, show the U.S. trailing peer nations, the researchers said.

Contributors to costs

The researchers noted findings from their analysis contradict several common assumptions:

Price of professional services, drugs and devices and administrative costs, not demand for services or aging of the population, produced 91% of cost increases since 2000.

Personal out-of-pocket spending on insurance premiums and co-payments have declined from 23% to 11% since 1980.

In 2011, chronic illnesses accounted for 84% of costs among the entire population, not only of the elderly. Chronic illness among individuals younger than 65 years accounted for 67% of spending.

Contributors to change

The authors said three factors have produced the most change:

• Consolidation, with fewer insurers and general hospitals (but more single-specialty hospitals and large physician groups), has produced financial concentration in health systems, insurers, pharmacies and benefit managers;

• Information technology, in which investment has occurred but value is elusive;

• The patient as consumer, whereby influence is sought outside traditional channels, using social media, informal networks, new public sources of information and self-management software.

The authors wrote that these forces create a triangle of tension among patient aims for choice, personal attention and unbiased guidance; physician aims for professionalism and autonomy; and public and private payer aims for aggregate economic value across large populations.

“Measurements of cost and outcome (applied to groups) are supplanting individuals’ preferences,” the authors wrote. “Clinicians increasingly are expected to substitute social and economic goals for the needs of a single patient.”

The authors wrote that at the highest level, the U.S. health system is struggling to adapt to competing goals, desires and expectations. “The conflict among patient desires, physician interests and social policy is certain to increase.

“Those tensions will likely become a palpable force that may hinder care integration and inhibit other changes that favor improved outcome and savings. The usual approach is to address each constituency in isolation rather than optimizing efforts across them. The triangle will need to be reconciled. This is the chief challenge of the next decade.”

Would people tolerate less choice and freedom in their healthcare to develop a more efficient system? A discussion, based on valid and unbiased information, must begin to truly innovate to deliver greater value and lower cost, Moses said in a news release.

Thus far, he said, “the political process has failed us badly.”

Report abstract: http://jama.jamanetwork.com/article.aspx?articleid=1769890


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