With Democrats poised to control the House and Senate following the midterms, healthcare affordability is likely to remain a priority. But lowering costs will require more than debating insurance coverage.
Recent national polling shows that 89% of voters believe it is important for Congress to act on hospital prices within the next two years. The demand for intervention is bipartisan, including 93% of Democrats and 86% of Republicans. And they have good reasons to be concerned. Congress needs to move beyond marginal changes and address the fundamental flaws in our healthcare delivery system, starting with the financial incentives that preserve outdated models of care, drive up costs and fail to deliver better outcomes for patients.
Over the last 20 years, the healthcare delivery system in the US has been steadily deteriorating. Costs have continued to rise without commensurate improvements in quality—either in patient experience or outcomes. Burnout among physicians and nurses has also risen steeply. At the same time, breakthrough innovations in lifesaving medicines and medical devices have given patients with serious illnesses reasons to be optimistic.
Throughout this time, administrators across the healthcare sector have known that the model under which they work is broken and needs to change. They have bemoaned the fact that procedures once performed in inpatient facilities have continued to move to outpatient and non-hospital settings, and that more complex care is delivered within their facilities, while the easier, more profitable procedures have been siphoned off. For patients, on the other hand, the shift has meant greater convenience, easier access and lower costs.
Technology has enabled care to be delivered differently, in different settings, but administrators have worked to preserve the status quo, even when it’s more expensive for patients. It’s what they’ve always known. Rather than step back and take a fresh perspective on what they do and how, they have doubled down on the past.
Massive consolidation across healthcare delivery has been a trend across the country, partly an effort to build enough scale to push back against commercial payers and the government, both of which continue to work to ratchet down reimbursement. Together, payers and provider organizations have worked to increase bureaucracy—one side trying to hold down costs while the other works to increase reimbursement for what they deem more complex care. Unfortunately, this bureaucracy adds cost and complexity to the overall system without improving health outcomes.
Over the years we’ve all become used to acknowledging that our healthcare delivery system is getting worse, and then we simply move on, waiting until the next enrollment year and wringing our hands over premium increases. Someone always gets blamed: the pharmaceutical industry, insurers or even patients for not following physician orders and demanding too much. Even when critics identify the root cause – most frequently the incentive structure – rarely does anyone seriously discuss changing the model.
One key reason we’ve learned to live with the decline of our healthcare system rather than doing something about it is that consumers have no one at the boardroom table that speaks for them. Our healthcare system reflects a complex patchwork of deals struck between providers, insurers, and the government.
The closest we’ve come to a voice for consumers is through associations that represent regional employers who are being pushed to the wall by escalating healthcare premiums. But even these associations are fragmented and lack a national voice to drive meaningful change. If we had someone banging on the podium for system-wide change, we wouldn’t be where we are today.
CMS has tried to make changes, but most have been marginal. For all the money spent by CMMI on experimentation, $1B annually, there is little to show for it. Hospitals have successfully slow-walked compliance with even basic price transparency requirements for comparable services.
In the wake of the midterms, Medicare for All is once again being touted as the next silver bullet to fix our deeply flawed healthcare system. Unfortunately, it promises to make things even worse under the banner of making them better. It will not address the serious underlying flaws in the current model, even if it extends coverage to more Americans and according to some legislators, to those who are in the country illegally. Bipartisan analyses have suggested it will add another $50T to the federal deficit.
Rather than arguing about Medicare for All and how much it will cost, we must address the flaws in the current system. It’s not working and hasn’t been for decades. The model was designed around assumptions about care delivery that are more than 60 years old. Some of us know what needs to change; we need the will to do it. Only then will we have the funds to expand access to those who need care. Until then, the system will continue to implode.
Michael Abrams is managing partner of Numerof & Associates.
