The quality problems with the US healthcare system

19 November 2020

The quality problems with the US healthcare system

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After a nail-biter of an election, President-elect Joe Biden faces a huge obstacle to tackle in the next 4 years: the deep underlying problems with the US healthcare system

Despite ploughing $2.6 trillion into health research, care and services every year – the highest per capita figure in the developed world – the U.S. lags behind other industrialised nations in a string of key healthcare indicators, receiving a modest Healthcare Quality & Access (HAQ) Index Rating of 88.7 in 2018.

In his acceptance speech last week, Mr Biden referenced the looming ‘battle to secure your family’s healthcare’. The weaknesses of American healthcare, and the challenges impeding the delivery of consistent healthcare quality to 330 million citizens, stand out as a major target for the US government in a decade kick-started by a major global pandemic.

So what quality problems does American healthcare face? And what can a new Democratic White House do about it?

Problem #1: The leaking bucket

Quality professionals in healthcare, as in any industry, understand the value of optimised efficiency. Minimising expenditure, defects and wastage, maximising the value and impact of corporate spend and embedding continuous improvement are at the forefront of modern quality management. 

But it’s difficult to see the US healthcare system as a paragon of efficiency or continuous quality improvement. The US ’ mediocre global healthcare rankings, despite spending 50% more than its closest rival (Norway) in per capita healthcare investment, clearly demonstrate a leaking bucket. In other words, the US is throwing vast amounts of money at its healthcare system - but it’s spending its dollars in the wrong ways.

3 key sources of this general inefficiency stand out:

  • The decentralised, direct-fee private insurance system underpinning American healthcare makes a vast quantity of accountants and clerks necessary to perform the record-keeping, billing and administrative tasks required by hundreds of insurance organisations. Administration accounts for 14% of healthcare costs alone, according to a 2011 survey.
  • In spite of this administrative bloat, investment in electronic systems remains limited, perpetuating inefficient, costly and time-heavy paper-based systems. Computerisation, integrated information systems and even email communication with patients remain low.
  • A largely unregulated ‘fee for service’ model allows hospitals and professionals to charge more for their services than in any other country – in turn incentivising superfluous or unnecessary services to maximise income, such as extra diagnostic tests and add-on procedures. Conversely, and closely linked with the point above, healthcare providers face little incentive to modernise and digitise how they operate, with chargeable face-to-face correspondence preferred over more efficient electronic communications.

What does all this mean? The astronomical costs of US healthcare simply don’t translate into comparable levels of quality for patients. The bucket’s being filled, rather than patched.

Problem #2: Decentralisation

Whatever its political merits for the American federal system, decentralisation has opened the US healthcare system up to several deficiencies and weaknesses.

The absence of central oversight makes negligence, and even deliberate criminal activity, less likely to be rooted and stamped out – bringing serious wellbeing and quality issues for US patients.

In 2018, Wondery’s popular Dr Death podcast charted the story of Dr Christopher Duntsch, a Texas-based neurosurgeon who killed or maimed 33 patients in the Dallas-Fort Worth metropolitan area between 2010 and 2013.

Despite catastrophic repeated incompetence in the operating room, and even email exchanges suggesting some deliberate intention to harm, Duntsch circulated freely between several Texan hospitals after being dismissed multiple times. Only persistent lobbying of the Texas Medical Board and the National Practitioner Data Bank ultimately brought Duntsch’s actions to light.

UT Southwestern’s director of neurosurgery commented that “the only way this happens is that the entire system fails the patients”. In fact, it’s estimated that around 100,000 Americans die from medical errors each year – more than from car crashes or breast cancer.

And a lack of general oversight and regulation might explain why the US healthcare system’s error and delay rate is the highest in the world, despite widespread underreporting.

We can also see widespread deliberate exploitation of the fragmented US healthcare system. In 2017, 412 nationwide health practitioners were charged with defrauding the US government by billing Medicaid and Medicare for tests and treatments which had never taken place.

Medical fraud, including so-called ‘ghost patients’, fabricated tests and even billing for patients who were dead at the time of ‘treatment’, costs the US healthcare system $100 billion every single year.

Discrete, unintegrated systems of hospitals, private insurers, nursing facilities and home care allow fraud and exploitation to flourish while minimising quality assessment and assurance as patients are handed off to move between different layers of the healthcare system.

As Ken Shine, former President of the Institute of Medicine puts it:

“We operate our healthcare system like a cottage industry, big, big cottages with state-of-the-art technologies to care for patients, but infrastructure which is totally inadequate, systems which don’t talk to each other.”

This decentralisation ultimately weakens the delivery of consistent healthcare quality, with multiple studies and surveys highlighting:

  • Limited coordination and continuity of care
  • Miscommunication
  • Wasteful, redundant processes and systems

These coordinative shortcomings were thrown into sharp relief by the impact of the COVID-19 pandemic, with the U.S. death rate outstripping any other country as of November 2020.

Problem #3: Limited patient centricity

The core objective of quality management? To satisfy the recipients of your services with targeted, fit-for-purpose processes. Yet we can see numerous areas where the US healthcare system fails to take into account the needs and wants of patients.

Along with the wasteful, expensive and often unnecessary treatments we’ve already seen, the US lags behind other developed countries in its ability to treat avoidable mortality: hospitalisations for preventable, ambulatory care-sensitive conditions such as diabetes and hypertension were 50% higher than the OECD average last year. Americans are also less likely to visit a doctor or dentist than their counterparts in other countries.

And around 16% of Americans have no medical insurance whatsoever, opening them up to financially crippling medical bills like this one in the event of an emergency.

It’s estimated that around half of American bankruptcies are at least partially caused by medical debt – with prices set not by patients’ service satisfaction or ability to pay, but by a complex interplay of profit-sharing, contractual agreements and negotiations between a string of third parties.

Compared to similar countries, the US remains marked by:

  • Low life expectancy
  • High suicide rates
  • High obesity
  • High chronic disease burden

Yet the healthcare system remains largely geared toward acute short-term care, rather than treating the chronically and long-term ill.

Take into account other factors like the prescribed opioid epidemic unfolding since the 1990s, and it’s clear why around 7 in 10 Americans hold a negative view of healthcare in their country.

In short? Many Americans do not feel their healthcare system accurately reflects their expectations or provides the targeted, appropriate treatment they need. Scaling these quality challenges will be an unavoidable hurdle if trust and satisfaction are to be increased.

Conclusion: the role of quality

In many ways, the quality challenges in the US healthcare system are similar to those affecting many modern businesses. Disconnected siloes, leaky processes, limited use of digital systems and failing to place customer needs front and centre all hamper the delivery of effective healthcare quality in the US. Joe Biden's healthcare plan will be a key barometer of his next 4 years in the White House. 

Learn more about digital healthcare systems

Written by

Alexander Pavlović

Alex produces targeted content to help Ideagen’s readers and customers navigate the complex world of quality, governance, risk and compliance.

Alex has worked with brands such as BT, Sodexo and Unilever and is passionate about helping businesses build a cohesive, collaborative culture of quality.

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