National Health care Expenditure – or NHE’s costs are beyond “out of control.” The NHE is $3 trillion – this year. As mind boggling as this astronomical financial amount is, the basic problems within the health care industry are increasing at a faster rate than the aforementioned costs. Reducing health care costs while improving patient care is a common goal and continuing challenge for the industry — and there’s a lot of room for improvement. The United States has the most expensive health care system in the world, but is last or near last on dimensions of access, efficiency, and equity, according to The Commonwealth Fund’s 2014: Health Care Year in Review.
At every turn, the health care industry is under pressure to cut costs and improve quality. Many health care leaders understand that there will be little room in the health care landscape of the next decade for laggards. These leaders may feel confident about their strategic direction, but they know their current models won’t get them where they need to go. There is no doubt that their objectives are relatively unique in comparison to other industries. The health care industry has a hybrid of nuances that are not present or required for others. For example:
- It is a medical business;
- Requires a humanitarian aspect;
- Financial milieu second to none;
- Degree of complexity / bureaucracy;
- Enforced payments and cost structures;
- Degree of scrutiny;
- Expectations of a “non-profit”;
- Technology and the never-ending rate of transformation;
- Degree of continuous training; and
These factors are creating a substantial increase in the number of health care organizations requiring revenue enhancements, turnaround services or optimizing their core, antiquated processes and business model. Few health care leaders would disagree that the U.S. health care industry needs to drastically change. But do we have visionary leaders within the industry to accept the need for change and seek solutions outside the industry? The necessary change from within is virtually impossible. It will take catastrophic event(s) before the individual health care facility seeks professional assistance. In my professional experience, the events need to be materially worse than in non-health care industries.
Let’s face it. No matter how committed an organization is to providing the best care, it’s often difficult to take the steps necessary to kick off change without some kind of financial stimulus in the picture. Throughout the industry, payers and providers are formalizing financial arrangements that motivate providers to improve their processes, while benefitting payers, providers and patients.