By Robert E. Grant, CONCIERGE KEY Health Founder and CEO
The history of the U.S. government meddling in healthcare is long, dating back at least as far as the early 1900s, when special interest groups began lobbying politicians to reduce competition and increase favorable legislation. Since then, the U.S. healthcare sector has been subject to a broad range of binding rules and regulations that have resulted in a chaotic, bureaucratic system that makes the behemoth U.S. military industrial complex—at 3.5 percent GDP (gross domestic product)—seem like a small business.
At $3.54 trillion, the U.S. healthcare industry accounts for almost 18 percent of the nation’s GDP and is bigger than the GDP of the United Kingdom, India, France, Mexico and Canada, among other countries. Yet, even with all of that spending, the U.S. is nowhere near the top when it comes to healthcare access, outcomes, equity and administrative efficiency. In fact, the Commonwealth Fund ranked the U.S. healthcare system the worst among the 11 developed nations it analyzed in 2015 as part of an evaluation it conducts every three years. With bureaucracy largely to blame for its poor standing, the U.S. still continues to forge ahead as the nation’s leading healthcare employer, with spending on a trajectory set to reach $5.7 billion by 2026.
Hospital administration grew 3200 percent from 1975 to 2010.
-Physicians for a National Health Program
No area of healthcare employment has experienced more growth than hospital administration, which Physicians for a National Health Program reports grew 3200 percent from 1975 to 2010, while the number of physicians grew only 150 percent. Accounting for 25 percent of all healthcare spend in the seven years since the Affordable Care Act was passed in 2010, the compensation of healthcare administrators has far surpassed the wage growth of nearly all Americans, with the top-earning CEOs taking home up to $900 million a year. With numbers based off of an analysis conducted by Bob Herman, a healthcare business reporter for Axiom, National Public Radio (NPR) revealed that, in the last seven years, the 113 heads of 70 of the largest U.S. healthcare companies cumulatively earned $9.8 billion—while the U.S. ranked second to last in administrative efficiency.
Inarguably, administrators with big paychecks do little to relieve doctors and clinicians of the tremendous documentation burdens and administrative glut they face, though it is the primary focus of their job to increase efficiency, cut costs and eliminate bureaucracy. In fact, it seems administrators have achieved quite the opposite. In a 2016 survey of 17,000 doctors conducted by the Physicians Foundation, 80 percent reported being overextended or at capacity due to excessive non-clinical duties, with no time to see additional patients. It’s understandable considering that, in 2015 alone, doctors had to adapt to a host of disruptive changes including:
- Expansion of health insurance coverage through the Affordable Care Act (ACA) to include 20 million people.
- Passage of the Medicare Access and CHIP Reauthorization Act (MACRA), which restructured doctor reimbursements Medicare—moving payments from “volume” to “value.”
- Implementation of ICD-10, a plethora of disease classification codes (from 14,000 to 68,000)—of which many are preposterous—that doctors must use.
- An ongoing and unaddressed doctor shortage, which in 2015 the Association of Medical Colleges (AAMC) predicted would result in a deficit of up to 90,400 by 2025.
- Mergers and acquisitions including the consolidation of approximately 100 hospital/health systems totaling some $400 billion in 2015 and ushering in a new era: the corporatization of healthcare.
Key findings from the Physicians Foundation invariably point to a continuous struggle for doctors to maintain morale, adapt to changing delivery and payment models and provide patients with “reasonable” access to care. In addition to 54 percent of doctors admitting their morale is somewhat or very negative, almost half revealed they suffer from burnout. These findings are consistent across the board, with similar studies indicating a much greater problem beyond the health and well-being of doctors. In a June 2018 Medscape report, nearly two-thirds of the 15,000 U.S. doctors surveyed said they feel burned out, depressed or both, with nearly 15 percent admitting their depression may cause them to make medical errors, which are now the third leading cause of the death in the U.S.
In an ecosystem that includes not only doctors, nurses and hospitals but also medical equipment and device manufacturers, pharmaceutical companies, health insurance firms and a wide range of both publicly funded and private healthcare-related organizations employing high-paid lobbyists to influence legislation, it is no wonder the U.S. healthcare system is in a free fall. But just how far it falls has yet to be determined.
Perhaps the announcement of launching a new healthcare company by Amazon, Berkshire Hathaway and JPMorgan Chase is an indication. Teaming up to provide high-quality healthcare at a lower cost for their combined 950,000 U.S. employees, the triumvirate is responding to a healthcare system Warren Buffet likens to “a hungry tapeworm on the American economy.” While the new company promises to be “free from profit-making incentives and constraints,” with an initial focus on technology solutions that will “provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost,” only time will tell.
In the end, the U.S. healthcare system must break free from the chains of a bureaucracy, with those leading the charge bound not by profit but by the desire to put the interests of patients first. Given the current dysfunctional system, change is certain not to come from the culprits who have made it so critically ill.