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Failure to Change

November 1, 2006
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High spending and low efficiency continue to characterize the U.S. healthcare system.

This is an industry in which nearly everyone has a stake. Barring those whose personal beliefs prohibit them from seeking medical care, the healthcare delivery system touches each of us. And if continuing reports are any indication, few of us are content with the state of affairs.

The industry reputation of rapidly escalating costs, inefficiency and persistent medical errors continues to be the benchmark. The United States can't be called stingy. According to a report issued recently by the New York-based Commonwealth Fund, this country spends twice that of the median industrialized nation.

We may be spending the most, but we're clearly not getting our money's worth. When outcomes are compared against peer countries, we continue to get failing marks. On the most recent national scorecard of U.S. healthcare system performance (which measured outcomes, quality, access, efficiency and equity — based on 37 key indicators) our overall score was 66.

The efficiency score was a dismal 51, citing high insurance administrative costs — more than three times those of countries with integrated insurance systems — and lagging adoption of electronic medical records by U.S. physicians. U.S. physicians' adoption rate is 17 percent. In the top three countries, it was 80 percent.

An even more sobering measure of the system's capacity to innovate and improve wasn't even scored. Innovations in the ways care is delivered will be necessary to achieve improvements across all dimensions of care, states the report, but investments in research necessary to accomplish change is low. Estimating that $1.5 billion, or only $1 out of every $1,000 spent nationally on healthcare has been earmarked to discover better ways of delivering care, the report concludes there are no good indicators for the system's capacity to innovate and improve.

Legislators in both houses of Congress know something must be done and are struggling with trying to create an environment of change. The difficulty is that they're trying to create a market-driven solution with regulations. Tricky, at best.

Two healthcare IT-related bills, one from the House and one from the Senate, were left on the table when Congress adjourned and lawmakers departed for pre-election campaigning. The hope was — and continues to be — that the two could be reconciled into a compromise acceptable to both houses. Although it is possible for talks between individuals to continue outside of Washington, the odds of a compromise before year-end go up with each passing day.

Then there are those who foot much of healthcare costs. Six years ago, a group from the Business Roundtable, which is made up of Fortune 500 companies, launched the Washington, D.C.-based Leapfrog Group to tackle patient-safety issues. Now facing global competition with nations unhampered by the burden of employer-based insurance, employers who have shouldered the bulk of non-governmental insurance premiums for years now seem ready to mobilize on cost-cutting measures.

Among those top-level industry leaders who regularly speak out on the inadequacies within the administrative practices of the U.S. healthcare system is Craig Barrett, CEO of Intel, Santa Clara, Calif. In a keynote speech delivered to attendees at the HIT Summit in Washington, D.C. earlier this fall, he said, "The system is out of control. It's unstable and it gets worse each year. If we continue along the current track ... every job that can be moved offshore will, primarily due to healthcare costs."

Calling on the nation's employers to lead, Barrett hints of an employer coalition. In a market-driven economy such as this, it may be a very effective route to change.

Author Information:

Charlene Marietti

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