There is absolutely question that U.S. healthcare is in a state of great ferment these days. The shift from volume-based payment systems to value-based ones is well underway, with accountable care organization (ACO) programs, both federal and private ACOs growing by the day in number and scope, and with population health management and enhanced primary care initiatives moving ahead by leaps and bounds. Meanwhile, with healthcare costs continuing to rise, and with public and employer healthcare expenditures growing by the day, hospitals, physicians, and other providers in the U.S. are inevitably facing a variety of combinations of pay cuts and an ongoing, accelerating shift towards value-based reimbursement, going forward.
What’s more, the foundational dynamics underlying these changes are only accelerating: an aging population, an explosion in chronic illnesses of all kinds, but especially those related to obesity and poor lifestyles, and exploding costs related to advances in medical technologies and pharmaceuticals. Taken together, they portend a kind of “perfect storm” facing United States society. As I’ve referenced in a number of articles and blogs this year, the Medicare actuaries estimated back in July that total U.S. healthcare expenditures had reached $3.3013 trillion in 2014 and 17.5 percent of gross domestic product, but further, will grow to $5.631 trillion and 20.1 percent of GDP in 2025. In other words, a 70 percent increase in a decade. And as everyone knows, we as a country are struggling to pay for the healthcare system we have now, let alone one costing 70 percent more (and with fewer younger taxpayers to support the increasingly expensive system over time).
All of this is concerning—even alarming—of course. And really, anyone who is awake and alert should be concerned about all of this. But the reality is that this set of challenges extends far beyond the United States. Indeed, virtually all of the western European nations, as well as such advanced, industrialized nations as South Korea, Japan, and Taiwan, and, increasingly, nations like China and India, which have growing middle classes (whose members are also eating more and more processed and fatty western foods), and which are beginning to see their populations move into the age curve as well, are facing these challenges. As some demographers and sociologists have noted, as industrialized societies advance, their fertility rates decrease, creating a growing “upside-down pyramid” problem that has policy experts in many countries worried. Interestingly, it is Italy, historically and stereotypically perceived as a society of large families, now has the lowest replacement factor of all the western European countries, at 8.4 per 1,000 people, as this Telegraph of London report notes. At that rate, people in Italy who are dying are not being replaced by newborns, meaning that Italian society is headed towards a crisis of social services, as people become older and require more healthcare and other services, and the burden for supporting that country’s social welfare system, including its healthcare system, falls on fewer younger, healthier people.
That’s why it was particularly fascinating to participate in the World of Health IT (WoHIT) Conference in Barcelona in November, sponsored by the Berlin-based HIMSS Europe, a division of the Chicago-based HIMSS (Healthcare Information and Management Systems Society). Not that anyone should derive satisfaction from the fact, but it was strangely heartening to learn that virtually all of the western European societies are struggling with the same core problems facing us in the United States.
True, the governmental systems and national healthcare systems of western Europe are different from those of the United States, in very significant ways. And the same goes for many of their societies. For example, the Nordic countries—the Scandinavian countries of Norway, Sweden, Denmark, and Iceland, plus non-Scandinavian Finland—enjoy broad social and cultural homogeneity with relatively small populations, strong overall sociopolitical consensus around the idea of a progressive and encompassing social welfare state, and single-payer healthcare systems. At the same time, all of those countries are experiencing the aging problem that Italy has; and all have significant levels of chronic illness, as well (though none have the rates of chronic illness that the United States has, and none have levels of adult or child obesity comparable to those in the U.S.).