Healthcare expenditures account for 18.3% of the Gross Domestic Product (GDP) and has increased year after year to $4.3 trillion in 20211. The United States population is growing slowly, 0.5% increase from 20222. Life expectancy in the U.S. had been rising from 68 years in 1950 to 79 years in 2019 until a more recent decline to 76 years in 2022. This decline has been associated most with the COVID-19 pandemic and increase in drug overdoses3. As the population is living longer, the incidence of chronic conditions such as diabetes and heart disease increase in complexity and duration. The management of these chronic illnesses account for 90% of the National Health Expenditure (NHE)4. In addition, the portion of the NHE spent on nursing home and long term care facility costs continues to increase to care for the elderly and disabled.
The issue of the increasing aging population has brought about some discussion of rationing of care. However, one of the predominant theories of the high cost of healthcare is the assumption that much of the cost is related to taking care of the uninsured. Those who do not have insurance may seek care in public not for profit health systems who absorb those unreimbursed care costs into their health system budgets. The government brought about the ACA of 2010, Obama Care, which essentially required people to have health insurance or pay a penalty with the goal of decreasing the number of uninsured. This plan did lead to more citizens insured but also grew the number and competition among healthcare insurance companies. These companies are able to control how care is given including what medications and treatments are covered, and where these treatments can be received. In my own workplace, we may negotiate with insurance plans to help drive business in our direction. For example, Plan XYZ would contract with our health system to provide care to their 10,000 participants if we agree to bundle our common surgical procedures (e.g. cholecystectomy) at a 30 percent discount. These types of negotiation technique can drive competition in both beneficial and detrimental ways. Restricting what care and where it can be given may motivate some to seek self pay private care if it can be afforded. Concierge medicine providers avoid the headaches of insurance plan restrictions, but may also drive up care costs by provision of unnecessary diagnostic studies and treatments.
The Jonas chapter 6 describes the methods of provider reimbursement including fee for service as well as value based care. As a provider in a cancer clinic, we often hear complaints about cost of visit co-pays, inconvenience of travel to our academic center for expert care, and other expenses. There is some misinformation that the providers also drive up the cost. This certainly may be true in private practices, which are slowly dwindling away because of the cost of healthcare business. In our health system and many others, the providers and clinical care teams are just as frustrated by the overall expense of medicine. We try within our practices to be frugal when choosing medications or deciding on what x-rays are needed. We are encouraged by our administrators to drive revenue through seeing more patients, which often results in less time with our patients. Interestingly, billing regulations from Medicare changed this year to include billing visits based on time spent (in minutes) both face to face and coordinating care (reading outside hospital notes, reviewing prior imaging and labs). As a result, providers see this as much desired recognition of the time spent in totality for a consult for new metastatic pancreatic cancer patient who is jaundiced, malnourished, and in intractable pain. It does not marry well with the drivers for the administration who want to see more visits through the clinic doors. As a result, we see more patients each day for long visits to address all of their needs which leads to clinic staff exhaustion, burnout, and staff turnover.
Essentially, my interpretation of learnings of the finances of healthcare is it is a business. When healthcare providers and/or employees started on their healthcare education journey, we were not taught about the financial components of care. Most only saw this as a career path to help others who are sick and in need. We are now acutely aware that healthcare feels more like a business than when we started. We suffer from moral injury because we want to provide exceptional care to our patients but often are limited by lack of resources, increased restrictions on what insurance companies allow us to do, and inability to provide the underserved with the same level of care as the rich. We are all in the same battle to see everyone have access to quality and equitable care.
1.NHE Fact Sheet. Centers for Medicare and Medicaid. Updated December 14, 2022. Accessed January 25, 2023.
2. U.S. Population Growth Rate 1950-2023. Macro Trends. 2023. Accessed January 25, 2023
https://www.macrotrends.net/countries/USA/united-states/population-growth-rate
3. Shmerling, R.H. Why life expectancy in the U.S. is falling. Harvard Health Publishing, 2022. Accessed January 25, 2023.
https://www.health.harvard.edu/blog/why-life-expectancy-in-the-us-is-falling-202210202835
4. Centers for Disease Control and Prevention. National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP): Health and economic costs of chronic diseases. 2019. Retrieved from https://www.cdc.gov/chronicdisease/about/costs/index.ht