Coverage, cost and consistency: The 3 challenges of American healthcare

July 19th, 2018 / By Steve Delaronde

The plight of the American healthcare system has been discussed for decades. Researchers and practitioners have developed some of the most advanced medical interventions for victims of trauma, congenital anomalies, formerly life-shortening cancers, and have discovered ways to prolong the life of those afflicted with once deadly conditions, such as heart disease and Type I diabetes (although the discovery of insulin is credited to two Canadians, Frederick Banting and Charles Best). However, the United States has not delivered on universal healthcare coverage for its citizens, a predictable and affordable cost structure for healthcare services, or a systematic and consistent way for Americans to receive healthcare and address their physical and mental health issues. Why is the wealthiest and most influential country in the world still dealing with these issues?

Healthcare Coverage

There are multiple reasons that the United States remains one of the only industrialized countries not to provide universal and affordable access to health insurance. It is rooted in differing ideologies, priorities, and even the impracticality of using our current fragmented system as a platform to achieve universal coverage. The Affordable Care Act (ACA) tackled the problem of access by building upon our current government and commercial insurance-based system by expanding Medicaid eligibility, while offering an affordable option (and mandate) for uninsured persons to obtain individual insurance. While progress has been made to reduce the number of Americans without health insurance by 19.3 million from 2010 to 2017, there are 29.3 million Americans, or 9.1 percent of the population that remain uninsured and few doubt that we have the policies in place that can further reduce that number. In fact, the gains made since the ACA was implemented are beginning to reverse.

Healthcare Cost

The high price of healthcare services, procedures, devices and drugs is the primary reason that the per capita cost of healthcare is higher in the United States compared to every other country. While unnecessary healthcare utilization exists and must be reduced, a recent article published in JAMA in March 2018 concludes that utilization reductions alone will not reign in healthcare costs. Substantial and long-lasting reductions in healthcare costs must include a formula for reducing prices, as well as utilization.

The uninsured pay the highest rates, since there is no third party to negotiate discounts. A greater proportion of commercially-insured patients are also bearing more of the cost, since 43.7 percent of those with private insurance are enrolled in a High Deductible Health Plan. Every other industrialized country uses the leverage provided by the volume of their population, whether nationally or regionally, to negotiate prices. This leads to lower prices for drugs and procedures for countries like Switzerland and the United Kingdom compared to the United States. Price stabilization, payment that corresponds to the intensity and effectiveness of the care delivered, and reductions in utilization are all necessary to achieve a measurable impact on healthcare costs.

Healthcare Consistency

It is estimated that 30 percent of the cost of healthcare is associated with waste. Much of that waste is a result of inefficient care delivery and unnecessary services. Variability is the enemy of quality. Robert Pearl identifies 4 of the most important determinants for achieving the best clinical outcomes in his book, “Mistreated: Why We Think We’re Getting Good Healthcare – And Why We’re Usually Wrong.”

  1. How well physicians are supported by information technology
  2. How well the entire medical team works together
  3. How consistently the medical team follows the best national guidelines
  4. How often a physician treats a specific problem or performs a specific procedure

Most conditions can and should be managed with guidelines, such that the care that a patient receives in New York to manage their diabetes is the same that they receive in California. Even more concerning is that the care received and outcomes achieved in hospitals or physician offices within the same zip code can vary dramatically. Risk adjustment is an important tool in helping make these comparisons across physicians, health systems, and regions. Ultimately, reducing variability through best and consistent practices needs to be a goal of every healthcare system.

Where do we go from here?

The three goals of addressing coverage, cost and consistency can be achieved simultaneously. Though there are multiple stakeholders, the achievement of these goals can be led by different entities. Government has the most influence over expanded coverage, payers are in the best position to influence costs based on what they are willing to reimburse, and providers must work towards the consistent application of best practices. The ultimate Triple Aim is the achievement of universal, affordable and consistent quality healthcare.

Steve Delaronde is director of consulting for populations and payment solutions at 3M Health Information Systems.