Effects of Healthcare’s Transition
from Acute Trauma/Illness to
By Jeff Gorski, PFS Group
The Centers for Disease Control and Prevention states that the top 10 leading causes of death in the U.S. are: heart disease; cancer; stroke; chronic lower respiratory diseases; accidents; diabetes; Alzheimer’s disease; influenza and pneumonia; kidney disease; and septicemia. In 2005, 133 million people — nearly half of all Americans — suffered from at least one chronic condition. But not only are many of these chronic diseases quite prevalent, they are also some of the most costly and yet preventable.
In the 1980s, health maintenance organizations, which provided managed care for health insurance, self-funded healthcare benefit plans, individuals and others, rose in popularity. The goals of HMOs were: to make it easier for people to see a doctor; manage costs with small co-pays (instead of paying bills up front and awaiting reimbursement); and lower the cost of insurance. In other words, HMOs were supposed to lower overall costs by preventing illness; but instead, HMOs became the gatekeeper of U.S. healthcare.
The Patient Protection and Affordable Care Act seeks to lower overall costs as well, but by transitioning the healthcare system from a focus on acute trauma/illness to one on preventative care. Specifically, reforms to Medicare, Medicaid and private insurance coverage intend to promote prevention and proactive efforts. By shifting the focus, not only can many diseases’ development and advancement be prevented or minimized, but healthcare costs can also decrease overall.
According to a Milken Institute study, basic interventions to improve health — such as weight control, better nutrition, exercise, greater reductions in smoking, aggressive early disease detection, a quicker adoption of improved therapies and less invasive procedures — could result in reduced costs of $217 billion annually by 2023 and $1.1 trillion in potential cumulative reduced costs by 2023. In other words, if it was possible to prevent or intervene in the early stages of disease, patients could avoid incremental costs. Currently, we are not aggressive enough in preventing certain diseases for people who are at risk.
By spending more on promoting healthy habits, early detection and better diagnosis of disease, we can potentially save patients from suffering (physically, emotionally and financially) and help them avoid more complicated, expensive care later. A focus on a continuum of health will result in a shift in spending, which will inevitably force a change in the structure of payor reimbursements. Healthcare providers today are often forced to make arbitrary cuts across departments as a result of lower reimbursements and subsequent revenue pressure — a tactic that threatens the quality and supply of care.
If hospitals reached out to patients with a proactive plan for preventative care, no longer does the existing complicated fee-for-service payment structure work. With hospitals getting reimbursed for quality of care, not quantity of exams, they are thus more encouraged to recommend higher quality, more cost-effective care for patients. Less tests and more proactive action will result in patients leading healthier lives and will ultimately save them money in the long-run.