Chapter Two

The Forces of Change in Health Care

 Learning Objectives
• Understand the need for real change in the way healthcare
services are produced and delivered to consumers
• Be aware of the changes in healthcare that will result from
passage of The Patient Protection and Affordable Care Act of
2010
• Understand the value of using economics to determine the
value of various medical procedures
• Be aware of the need for better use of technology in the
improvement of healthcare delivery
 Change in Healthcare Delivery
• Healthcare policy makers have finally come to the
full realization that cost escalation in healthcare:
• Has become a drag on the
• Has bankrupted many hard-working Americans
• Is no longer sustainable
• Resulting in tremendous changes are rapidly
engulfing the entire healthcare sector of the U.S.
economy
 Medical Megatrends
According to Schimpff (2012) the following shifts
will occur in medicine over the next years
• An increase in custom-tailored medicine
• A greater emphasis on prevention
• An improvement in the ability to repair,
restore function or replace organs, tissues or
cells
 Medical Megatrends
• Fully digitized medical records available
instantly, anytime or anyplace
• An enhanced level of safety and quality of care
 Forty Years of Cost Escalation
• Health care costs have risen from 4.6 percent of
GDP in 1950 to greater than 17 percent of GDP
in 2010
• The cost escalation is projected to reach over 20
percent of GDP in the next few years
• If the healthcare sector continues this cost
escalation the U.S. will have less to spend on
other public services like national defense and
education
 Medicare
• As the population grows older, the number of
recipients increases while the number of
workers paying for the program decreases
• As the program goes broke, benefits must be
reduced, reimbursement for health services
must be lowered or workers will have to pay
higher taxes, or a combination of all three
 The Chronic Disease Epidemic
The leading cause of death today is the
complications that usually result from having a
chronic disease for a long period of time.
The chronic diseases have very long incubation
periods, have multiple causes and cannot be
cured.
We often cause our own chronic diseases by
practicing high-risk health behaviors.
 Chronic Diseases Continued
Chronic diseases currently affect over half of the
U.S. population.
These diseases and their complications cost over
a trillion dollars a year.
The chronic diseases and their complications can
be prevented through health education
programs.
 Health Care Reform
• The discussion concerning health care reform in
our country normally focuses on increasing
access for all Americans.
• The latest attempt at reforming our health care
system was the passage of The Patient
Protection and Affordable Care Act in 2008.
• The Congressional Budget Office points out that
this new law should provide insurance for most
Americans while reducing the budget deficit.
 Comparative Effectiveness Research

Cost Effectveness Research (CER) represents a

comparison of existing healthcare interventions
to determine which works best for which
patients and which pose the greatest benefits or
detriments.
This version of economic analysis usually
consists of two major areas of concern:
effectiveness and costs.
Health Promotion and Disease Prevention

Americans are receiving only about half of the

preventive services recommended to them,
demonstrating the need for a greater role for
health promotion in our healthcare system.
Personal behaviors like tobacco use, poor diet,
physical inactivity and alcohol abuse have been
proven contributors to many of the major
chronic diseases and their complications.