Healthcare faces rapid change over the next few years, under the momentum created by new digital technologies, pharmaceuticals and therapeutic techniques, as well as automation, shifting demographics and changing payment systems.
Some of these changes will affect respiratory care more than other areas of healthcare. For example, emphysema and other forms of Chronic Obstructive Pulmonary Disorder (COPD) are strongly age related, and the incidence of these conditions can be expected to grow rapidly in countries with an ageing baby boom generation, such as the USA, Canada and Australia.
It is likely that one of the most powerful forces for change in healthcare will be the growing power of the consumer. Consumer power is emerging in different countries for somewhat different reasons and at different speeds.
In the USA, the key factor is the introduction of Consumer-Directed Health Plans (CDHPs), which make consumers responsible for more of their healthcare expenses, but also give them more say in choosing their healthcare providers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
A similar effect is being seen in Singapore and, much more importantly, China, both of which are following the lead of the USA toward CDHPs. In other countries, in which insurance of any kind plays a lesser or even nonexistent role, consumer power is nonetheless increasing because of widespread dissatisfaction with the effectiveness of healthcare spending, and the increasing transparency of all healthcare systems in a digital age.
Three factors are necessary for a market to behave like a consumer retail market:
- Consumer incentive:it must make a difference in some way (price, amenities or convenience) for the consumer to choose one product or service over another
- Provider competition:the consumer must not only have the legal and regulatory ability to make a choice, he or she must actually have a group of different providers to choose from, for any given product or service
- Full information:the consumer must have multiple sources of reliable, recent and relevant information on which to base their choice
All three of these factors are rapidly growing in influence in the USA, but also in most national healthcare systems and to an appreciable extent. And it is worth emphasising that it is not necessary for these factors to influence the behaviour of all or even a majority of a population for them to have a profound effect on that system.
When, in any system, providers actually compete for customers who have the ability, information and incentive to choose an alternative provider, they cannot afford to lose a sizeable portion of healthcare consumers.
The potential effects of consumer power are still under-appreciated across the healthcare sector, and they will affect respiratory care a little differently from other areas of healthcare, for some fundamental, structural reasons.
CONSUMER POWER DIMENSIONS
The effect of consumer power on healthcare has three separate dimensions: cost, quality and the patient experience.
Healthcare clearly costs too much, by any measure – this is glaringly obvious in the USA, where healthcare costs exceed those of every other country in the world by at least 50%, whether measured per capita or as a percentage of gross domestic product – and healthcare costs are the subject of increasing public concern and debate, while they are also a bone of political contention.
Yet nowhere has healthcare subjected its processes to the kind of rigorous, iterative and minute cost-benefit and quality analyses that many retail, manufacturing and service industries now consider routine.
Soon, however, consumer power, whether expressed through buyers’ choices or through political pressure, will combine with increased transparency to force everyone involved in healthcare to make this level of analysis a regular part of doing business.
Indeed, a number of hospitals in the USA have adapted the Toyota Production System to healthcare, rooting out inefficiencies, redundancies and waste even in minor processes – the placement of a fax machine or the cleaning of an infusion pump filter, for example – and saved tens of millions of dollars in the process.
Transparency is also changing the face of healthcare in terms of quality. In the USA, Canada and some other countries, various state, provincial, business, regional and federal initiatives are forcing healthcare providers to publish their statistics for particular types of outcomes, infection rates, adverse drug events and so on, and some initiatives are basing payment on these outcomes – in Pay-For-Performance (PFP) schemes.
The issues of quality and cost are linked, as lower quality in healthcare often goes with higher costs. The kind of sloppy system that produces higher costs typically also produces nosocomial infections and adverse drug events, and these in turn generate even more costs.
In Milwaukee, Minneapolis and some other areas of the USA, business groups have created a tiered payment system that tracks medical care by the case, and not by the individual incident. It uses co-payments to steer people through doctors and hospitals that have both better outcomes and lower costs over time. If you carry insurance through one of the employers involved in this effort, you can choose any doctor or hospital you want, but if you choose one that has not shown that it can produce better outcomes at lower cost, you will have to pay more.
In addition, consumers gain a voice and a sense of choice, we are seeing an increasing focus on the often-abysmal experience of being a patient – the long waiting times, the lack of real information, the feeling of powerlessness, the plain disrespect of the person evinced by many healthcare institutions.
Healthcare leaders, especially in the USA, are becoming increasingly aware that they face a future in which every mistake, every lawsuit, as well as complete price lists and outcome ratings will be displayed for the world to see on the internet.
In the next few months, the US Federal Government’s Centers for Medicare and Medicaid Services (CMS) will roll out the 26-question Hospital Consumer Assessment of Health Providers and Systems (HCAHPS) Survey for use by hospitals across the country, and the results will be posted on the web at hospitalcompare.hhs.gov. The survey will start out as a voluntary programme, but as of October 2006, hospitals that do not participate will lose 2% of all federal reimbursements.
However, as William Powanda, vice-president of Griffi n Hospital in Derby, Connecticut points out, coercion may not be necessary: "Think of a local community hospital with a lay board. Imagine what will happen when their hospital shows up in the lowest quartile. Resources will be reallocated. The message to management will be: ‘Fix this and fix it quick’. There is going to be a scramble to find solutions."
IMPLICATIONS FOR RESPIRATORY CARE
Much of the daily work of respiratory care is about education, remediation, monitoring and handholding. However, any system that involves an insurance model is skewed toward paying for a definable medical event – the office visit, the X-ray, the intubation – not towards long-term health or length and quality of life.
In such a system, the preventative, educational and monitoring aspect of respiratory care for chronic disease is seen as a cost. Institutions and physicians may not consciously deny preventative care because it reduces their patient flow, but across the spectrum of healthcare, the trend is obvious. Providers will provide the oxygen bottle and the brief home-health visit to hook it up, but they will not provide long-term preventative care for which they will not be paid because this reduces the stream of patient visits and admissions for which they will be paid.
So what do respiratory care patients want? They want clinicians who spend more time with them, listen to them and give them more hands-on care; they would like to not have to go to the doctor so much; they want their conditions to improve and to feel healthier. All of this points to the importance of education, remediation, monitoring and handholding, which is often done most easily, cost-effectively and conveniently by a respiratory care provider.
So what do those who pay for healthcare, whether they are employers or governments, want? They want lower costs and higher quality, happier employees and citizens, less waste and better use of healthcare funding. Again, all of this also requires education, remediation, monitoring and handholding.
This means that we are likely to see two different and somewhat conflicting trends in the near future. Both trends will show up sooner and more strongly in the USA, but they will also spread in other countries, especially among the rapidly growing urban middle classes of China and India.
The first trend will be that respiratory care tasks will become increasingly automated, networked and outsourced. Imagine, in detail, each of the tasks involved in respiratory care.
Ask yourself whether that task requires the dexterity of a trained person in the room or the judgment of a trained mind. If it does not, it is likely that this task will be automated, so that a computer can do it.
Alternatively, the task will be performed by a device that the patient can use at home. The task could also be networked, so that a computer somewhere else can do it, or outsourced, so that someone in India or the Philippines can provide monitoring and analysis or even carry out a consultation over the telephone.
As consumer-oriented healthcare takes hold, the second trend will be for people to increasingly make their own choices about the healthcare that they need, encouraged and guided by governments, employers’ coalitions and even the financial services industry involved.
Meanwhile, we are likely to see a wholesale shift towards recognising respiratory care as the cost-saving preventative process that it is. Skilled respiratory counselling in the home helps keep people out of the ER and the ICU, again through education, remediation, monitoring and handholding. We are likely to see this shift first in private sector pilots and partnerships in the USA, and then see it taken up by government funding bodies.
These trends do tend to come into conflict. Nevertheless, together they paint a picture of a future where aspects of respiratory care that can be automated or outsourced will take up less time and funds, while preventative aspects of respiratory care, which must largely be done in person with the patient, will grow in importance.