5 Ways to Achieve a Sustainable US Health System

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In the face of rising costs in American healthcare, Carla Smith outlines five ways in which the US can improve the financial sustainability of its healthcare system.

 

Let’s take advantage of systems-level expertise and change our reality for the better

In the United States, 18 percent of the gross national product (GDP) goes to healthcare expenses. In Germany, it’s 17.8 percent and 9.8 percent in the United Kingdom. So what?

Think about it this way. Most of us have a budget and we know that we need to use our monthly earnings to pay ‘x’ for our rent or mortgage, ‘y’ for our monthly car payment, ‘z’ to buy food…and, so on. And, to live within our means, we all make decisions about how much ‘x’, ‘y’, and ‘z’ can be based upon what we need and value. It can’t be higher than our earnings, or we’re in trouble. We can’t pay our bills.

It’s roughly the same at the national level. Each nation’s GDP is spent on various things its residents need and value. Things like roads, public safety, education, defence, and healthcare.  In a perfect world, a nation balances the proportion of its GDP that it spends on each important item.

When that balance is rattled, there’s trouble ahead. Over time, as more gets spent disproportionately in one area (like healthcare), that means roads can get full of potholes, there might not be enough public safety officers, and our children’s education can suffer.

 

The current cost of healthcare in the US

When we look at projections, we can see that the cost of healthcare in the United States is going up. For example, recent projections from the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary show:

From 2018 to 2027, expect the cost of US healthcare to expand and evolve with:

  • 5.5 percent annual growth of national healthcare costs; and
  • 5 percent annual growth of healthcare goods and services.

By 2027, look for US healthcare expenditures at:

  • USD 5.96 trillion; and
  • 19.4 percent of GDP.

 

Improving the financial sustainability of healthcare

How do we update and truly transform a nation’s healthcare system to maintain financial stability and ultimately, reduce the cost of healthcare? One ideal solution simply does not exist.

That being said, I do have some suggestions:

  1. Incorporate Value-based Care

Value-based care can benefit our entire healthcare system, because payment models are based on value rather than service, as I discussed in my value-based care post. Here, the healthcare team works together towards a common goal. Patients, clinicians, and caregivers partner to keep people healthy, and their chronic conditions well-managed.

 

  1. Create an integrated, Learning Health System for high-needs, high-cost patients (HNHC)

Research suggests that we can reduce costs and increase value if we develop a system that individualizes care for patients with specific needs, such as someone with multiple chronic conditions. By embracing a learning healthcare system model, researchers present an approach that addresses high costs within the system itself, and increases the value derived by patients.

 

  1. Healthcare is a Right, Not a Privilege

I believe that healthcare is a right; that all should have reasonable access to efficacious care that will prevent the onset of illness, tackle illness when it is present, effectively manage chronic conditions, and ease end of life. Many nations have dual systems in which the public sector covers a portion of healthcare costs, and the private sector the other portion.

One piece of legislation in the US – S. 1804 – Medicare for All Act of 2017 – includes a four-year phase-in where younger people could buy into Medicare beginning with 55-year-olds in the first year; 45-year-olds in the second year; and 35-year-olds in the third year. Consumers of any age could also choose a public option insurance plan through the Affordable Care Act (ACA) marketplaces.

 

  1. Embrace the Power of Telehealth

Telehealth has a distinct opportunity to positively move the healthcare needle. It can lower barriers to access for rural and underserved populations, reduce costs and improve efficiencies through better capacity utilization, and support value-based, consumer-centric care. As payers increasingly pilot and expand telehealth reimbursement programs, and clinicians and patients increasingly demand virtual access for their encounters, I see real potential for telehealth’s promise in health system sustainability discussions.

 

  1. Tackle Drug Pricing

The price of prescription drugs has increased substantially over the past few years. Insulin drugs, for example, have risen dramatically. Using claims from 2012-17, researchers predict that prices for popular prescription drugs will double every 7-8 years. We need bi-partisan health policies that can effectively address this urgent issue.

 

Next Steps

Even with these suggestions, we must continue our exploration of how best to sustain our healthcare system, factoring in public health crises (like substance abuse) and emerging opportunities (such as using social determinants of health to target care more effectively). Let’s take advantage of systems-level expertise and change our reality for the better.

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