“We spend far more on health care than other peer countries yet have worse outcomes. Why is U.S. health care so expensive?” I’m sure you’ve encountered similar statements, maybe even expressed it yourself. It occurs often, including by knowledgeable people and health-related institutions. However, it’s a fallacy because it confuses health care with population health.
Health care is a proper subset of population health. For example, longevity is determined by more than just health care. Using a specific recent estimate (Appendix Exhibit A6 – gated), an average 20-year old U.S. white male who did not graduate high school will live 10.5 fewer years than a similar man with a college degree. That’s over ten years of life related to educational attainment. Sure, there are many reasons for the difference, and health care or the lack of it is only one of them.
Writing in the March 20 issue of JAMA, Drs. Douglas Noble and Lawrence Casalino say that supporters of Accountable Care Organizations (ACOs) are all muddled over “population health.”
This correspondent says the article is what is muddled and that the readers of JAMA deserve better.
According to the authors, after the Affordable Care Act launched the Medicare Accountable Care Organizations (ACOs), their stated purpose has morphed from Health-System Ver. 2.0 controlling the chronic care costs of their assigned patients to Health System Ver. 3.0 collaboratively addressing “population health” for an entire geography.
Between the here of “improving chronic care” and the there of “population health,” Drs Noble and Casalino believe ACOs are going to have to confront the additional burdens of preventive care, social services, public health, housing, education, poverty and nutrition. That makes the authors wonder if the term “population health” in the context of ACOs is unclear. If so, that lack of clarity could ultimately lead naive politicians, policymakers, academics and patients to be disappointed when ACOs start reporting outcomes that are limited to chronic conditions.
The US healthcare system’s myriad of problems again seized the headlines recently with the release of an Institute of Medicine report, which found that 30 percent of healthcare spending in 2009 – around $750 billion – was wasted. Citing the “urgent need for a system-wide transformation,” the report blamed the lack of coordination at every point in the system for the massive amount of money wasted in healthcare each year.
One critical area in particular need of transformation is the business and operating model that drives healthcare in the US. There is broad-based agreement across the healthcare industry that the current fee-for-service model does not work, and needs to be changed. The sweeping health reform law enacted in 2010 included a range of more holistic, value-based payment structures that are now being referred to as “population health.”
Population health is an integrated care model that incentivizes the healthcare system to keep patients healthy, thus lowering costs and increasing quality. In this value-based healthcare approach, patient care is better coordinated and shared between different providers. Key population health models include:
· Bundled/Episodic Payments – This is where provider groups are reimbursed based on an expected cost for a clinically defined episode of care.
· Accountable Care Organizations (ACOs) – This new model ties provider reimbursement to quality and reduction in the total cost of care for a population of patients.
Healthcare: The Journal of Delivery Science and Innovation, a new journal promoting cutting edge research on innovation in health care delivery, has launched. The questions is, do we really need yet another journal? The short answer is yes. The longer answer is, absolutely yes. Here’s why.
The Need for New Knowledge on Healthcare Delivery
There is an urgent need to improve our mess of a health care system. Healthcare will consume about $2.8 trillion in 2012 – that’s an astronomical amount of money. To think of it in another way: spending in Intensive Care Units will make up 1% of all economic activity in the U.S. In a broader context, about 1 in 5 dollars in the economy will be spent on healthcare.
How will we actually spend the $2.8 trillion? Over a million doctors and nurses will see patients in hundreds of thousands of clinics, hospitals, nursing homes, and countless other settings. They will see patients who are sick and suffering and will make decisions about how to help them get better. These intensely personal decisions will be made in the context of a broader healthcare delivery system that is mindboggling diverse, complex, and fundamentally broken. We are probably wasting more on healthcare than we are spending on education. Yet, despite all this money and excess (or may be because of it), tens of thousands of Americans are dying each year because of poor quality, unsafe care. We can do so much better.