JAMA Delves Deep Into What's Ailing American Healthcare

Miriam E. Tucker

November 13, 2013

This week's edition of JAMA delves into current "critical issues" within the US healthcare system and proposes a variety of fixes.

The issue comprises a series of articles written by noted healthcare policy experts, all depicted on the issue's cover as if they were in an operating theater, with a raised-relief map of the United States as the "patient" lying on the table.

"The goal for this theme issue was to look below the surface of those issues that affect quality value and cost.... We wanted to take a more precise look at key elements that really contribute to the issues," JAMA Editor-in-Chief Howard Bauchner, MD, said at a press briefing.

Topics include trends in healthcare costs and outcomes, industry consolidation, setting goals for system change, the tension between population health and individual healthcare, and the need to design systems of care for the frail elderly that address their social needs, such as caregiving, in addition to their medical needs.

Four of the authors spoke at the briefing.

Costs and Conflicts

Hamilton Moses III, MD, founder and chairman of Alerion Advisors, LLC, North Garden, Virginia, and adjunct professor of neurology at the Johns Hopkins School of Medicine, Baltimore, Maryland, detailed trends from 1980 to 2011, using publicly available data analyzed by colleagues from the Boston Consulting Group.

In 2011, healthcare expenditures were $2.7 trillion, having doubled since 1980 as a percentage of gross domestic product (GDP), growing to 17.9%. Although government funding for healthcare increased from 31% in 1980 to 42.3% in 2011, the United States still trails many other countries in health metrics such as life expectancy at birth and survival with many diseases, Dr. Moses said.

In addition, contrary to common assumptions, the main driver of cost increases since 2000 (91%) has been prices (especially of hospital charges, professional services, drugs and devices, and administrative costs), rather than demand for services or aging of the population. Out-of-pocket spending on insurance premiums and copayments has actually declined, going from 23% to 11%. Chronic illnesses, present in about 46% of the population, account for 84% of overall costs in the entire population, not just the elderly.

"Chronic illness is where the misery is, it's where the money is, and where the greatest opportunity lies. If health systems can organize for chronic care, it will be a very positive development. In order to do that, they will have to invest," Dr. Moses said.

Factors that have brought the greatest change to the healthcare landscape are consolidation among physicians, hospitals, pharmacies, and insurers; information technology, which has grown tremendously, "but value is elusive"; and the patient as consumer, seeking medical information outside the medical setting.

Among physicians, there has been rapid consolidation into larger groups, with half now in practices of 5 physicians or more. About 75% of physicians are now significantly affiliated with or are employees of hospitals or health systems and are no longer independent practitioners. "The era of the individual physician has ended," Dr. Moses said.

A source of "tension" in the system has been the focus on performance measures that apply to groups, rather than individuals. "The outcomes are measured in the aggregate…. How do I say that my average performance for 600 patients with Parkinson's translates to Mrs. Jones? In the era to come, the patient has to have a voice."

In addition, Dr. Moses said, the US is "very myopic" when it comes to looking beyond our own borders. "There are lesson to be learned from other countries."

Going to the Moon

Ezekiel J. Emanuel, MD, PhD, the vice provost for global Initiatives and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania, Philadelphia, believes that the US healthcare system needs a "Big Hairy Audacious Goal," or BHAG, a term coined by the writer Jim Collins to describe a major, long-term transformative target akin to President Kennedy's plan to send astronauts to the moon.

To quality as a BHAG, the goal must be clear, measureable, long-term, transformative, and "attainable, but not guaranteed," defined as having a 50% to 70% likelihood of success, Dr. Emanuel explained.

He proposes this BHAG for America's healthcare system: "By 2020, per capita health care costs will increase no more than [GDP] + 0%." In other words, by the end of the decade, healthcare costs per person will not grow faster than the economy as a whole but, rather, will grow with the economy.

In recent years, healthcare inflation has exceeded the GDP by about 2% per year, so "It's not going to happen overnight," Dr. Emanuel noted.

Actions needed to achieve it, he said, include moving more care outside the hospital and new innovation to drive efficiency and reduce cost, such as electronic health record uptake and remote monitoring. In addition, incentives must be realigned to move away from fee-for-service to bundled payments or other quality-focused payment methods. Team-based care coordination for patients with chronic conditions is also needed, particularly for the top 10% of patients with chronic conditions, who consume nearly two thirds of all healthcare dollars.

"One in 10 Americans are the heavy users of the healthcare system.... Those are the people who drive healthcare costs. So, if you want to improve the quality of the American healthcare system, if you want to improve the cost control and make sure that healthcare doesn't grow faster than the economy, it's those 10% of people, caring for them better, that you need to focus on," he said.

A series of studies on the "hospital at home" model have shown a 19% reduction in cost. "I think that is the trend of the future, moving patients out of the hospital," Dr. Emanuel said.

In fact, Massachusetts, Maryland, and Arkansas have already adopted versions of the BHAG based on the growth of the states' economies, he noted.

Broad Agreement

Joshua Sharfstein, MD, secretary of the Maryland Department of Health and Mental Hygiene, cowrote the issue's editorial. He told reporters at the briefing, "This is a remarkable moment in healthcare, where there is broad agreement that change is needed and actually broad agreement on the kind of change that's needed."

The agreement, he said, extends to both political parties. There are innovative ideas, he said, but no current funding system for them. For example, someone recently asked him for money to fund a program in which handymen would survey an elderly person's home and fix things that could cause falls, such as loose carpeting. "It's a great idea, but there's no budget."

Almost everyone agrees that fee-for-service needs to go, he said. "If you're paying for something, you're going to get more of it. Switching out of that is essential.... I think there's broad acknowledgement that we need to figure out a way to switch that off in a way that is protective of patients and aligns the incentives for these kinds of creative solutions that are out there to improve outcomes," Dr. Sharfstein said.

He suggested that much of the incentive for these changes can be generated at the state level. "State leadership is incredibly important. There's a lot of interest in both red and blue states."

He also urged physicians to get involved. "We need medical professionals who are willing to engage in the political process saying we need to fix our healthcare system."

Focusing on Frailty

Joanne Lynn, MD, director for elder care and advanced fitness, Altarum Institute, Washington, DC, pointed out that when Medicare was enacted in 1965, the average lifespan was only a few years past the age of eligibility, and almost half the population did not live long enough to receive Medicare. Now, about 83% of the US population dies while covered by Medicare.

Now that people are living 20 years more, on average, a majority are living with progressive chronic conditions and frailty that often necessitate long-term caregiving, much of which Medicare does not pay for.

"We almost all get to grow old. It's the terrific success of modern medicine. But we haven't redesigned the system to cope with this new reality," Dr. Lynn said.

Since 1950, the number of elderly in the population has increased 8-fold, while the rest of the population has remained steady, and that number will double by 2030.

Dr. Lynn told the story of her own mother, who fractured a vertebrae and was prescribed surgery that the data from randomized controlled trials do not support. Medicare covers the procedure (which her mother did not end up having), but not what her mother really needed: A home care nurse to manage her opioids and help her regain mobility.

"It's just this banal overexpenditure that's driving us into economic ruin. It's the ordinary stuff," she said.

Indeed, the United States spends as much on the combination of healthcare and social services as most countries, but the ratio is different. Other countries spend twice as much on social services as on medical care, whereas the United States "funds social services as a safety net" and does not monitor those outcomes.

Dr. Lynn is involved at her institution with a recent care model called "Medicaring." Similar to an accountable care organization, Medicaring links together medical and social support resources in the community to focus on the needs of the elderly, such as food, transportation, and fall prevention measures. Cost savings would accrue by the improved outcomes.

Patient preference is a key element in the program. "You need to ask patients what's important to them. Customized service plans start with that. Did the person get to live as close as possible to what mattered to them? The evaluation of quality has to be against those values."

She is optimistic that the Medicaring model will work, provided people recognize the urgency. "You actually can do it for this population. You have to have the will to change."

Dr. Moses provides management consulting services to hospital systems, insurers, foundations, and pharmaceutical, device, and information technology companies. Dr. Emanuel has received payments for speaking engagements not related to this work. The other authors have disclosed no relevant financial relationships.

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