Back to Assessing the Future of Housing in KentuckyBy Forrest Calico*
Appalachian Regional Healthcare
From Exploring the Frontier of the Future: How Kentucky Will Live,
Learn and Work
pp. 49-54, published 1996
In 1995, under the auspices of the Kentucky Department for Health Services and the University of Kentucky Center for Rural Health, the Kentucky Health Interview and Examination Survey provided us with our most comprehensive and unbiased look at the health status of Kentuckians. The results reveal an unsettling picture of the physical and emotional readiness of citizens of the Commonwealth to face the challenges of a new millennium. Access deficiencies, geographic and economic exclusion from the health care system, high prevalence of chronic diseases, inadequate programs for children’s and women’s health, insufficient utilization of preventive services (even to the limited extent of their availability), significant obesity, and clinical depression stand out as challenges facing Kentucky. These examples provide ample opportunity for policymakers to develop and implement programs with the potential to improve health in Kentucky.
Unfortunately, the trends discussed in this chapter are not all positive, nor are they easy to address positively. Powerful market and governmental forces for change may address some areas of need by design; other needs may be ameliorated as an economic side effect (improvement of prenatal care to decrease costs of prematurity, for example). Unfortunately, many areas of need may actually be exacerbated by trends already well under way.
Fortunately, trends can be altered. If we recognize them, analyze them sufficiently to understand their origin and their impact on the health of the population, and estimate the rate of change, we can intervene proactively to reverse or modify trends, and even initiate new goal-directed trends. In order to effect positive results from trend analysis, Kentucky must create a vision for health care, develop programs and action plans to move toward that vision and actively mitigate counterproductive or pernicious market and regulatory trends.
As we develop our vision of the future, goals for an effective health care system must include:
The health care system is experiencing unprecedented, accelerating change from cottage industry to big business, principally driven by market forces. Interacting with this enormous dollar-driven engine for change are technological, demographic, and consumer forces which combine to produce eight noteworthy trends that will broadly influence health care.
Components of this trend include hospitals, ambulatory services, home services, the public health sector, and payers. This trend will occur both vertically (i.e., alignment of hospitals, physicians, and payers) and horizontally (i.e., hospitals developing collaborative arrangements or equity mergers). Sophisticated communication and electronic information systems (clinical, demographic, and financial) are both the result of, and a sine qua non for, this consolidation. This trend is a response to the reduction of dollars flowing to providers with the intent of forcing increased efficiency.
Negative impacts of this trend include excessive HMO pro-fits, destructive com-petition for market share, and lack of trust among hospitals, physicians, payers, and regulatory en-tities. Access and quality may take a back seat to financial interest. However, in situations where trust can become operative, a positive impact of true collaboration can produce benefits to all parties in terms of access, quality, satisfaction, and cost. As integrated delivery systems develop, the public health sector will function as an integral component, diminishing the current artificial public/private dichotomy.
Figure 1: Hospital Mergers in the United States
We are beginning to see serious efforts to evaluate quality and satisfaction in the managed care industry emerge. The new horizon for managed care will likely involve a shift to effective quality-oriented care management, rather than simply forcing a decrease in the dollars flowing to providers. Capitation financing (driving risk closer to the provider level) is a mechanism for incentive structuring, cost management, and change which is arriving on the scene in Kentucky.
Managed care, as we have known it, has grown in response to demands for reduction of total dollars flowing to providers. The effort has produced limited success. On the other hand, the evolving state of managed care is a result of excesses in profit margins, CEO salaries, and restrictions on choice viewed to be egregious by the general public. This has directed more attention toward precisely targeted improvement of care and cost management.
The emerging focus on true care management can positively affect outcomes, cost, and quality. More effective care management produces the opportunity to reduce medically unnecessary expenditures. Capita-tion, properly managed, can be a major component of a solution to the problem of managed care as we have known it. When incentives are placed on wellness rather than on procedures (a trend already well underway), the people of Kentucky will win. Because of the complex nature and significant public mission of health care, appropriate government oversight is needed to assure that the health care system is responsible and responsive to the needs of all Kentuckians.
Figure 2: HMO Enrollment in the United States, 1980-1995
The components of this trend include home services, ambulatory surgery, office care by physicians and other providers, partial hospitalization, alternative medicine, and care by nonphysicians. Also, technology allows dramatically increased sophistication of procedures that can be safely and effectively performed in home or office.
The reasons for this trend include cost management, tech-nological improvements, experience as it is gained by the professions, and changing expectations on the part of providers and consumers alike.
Impacts of this trend include rapid growth of home services (which may be sufficiently robust to produce regulatory and market curbs on home service costs), conflict between physicians and hospitals, and the risk of poor quality. This trend has the potential to improve both cost and quality factors of health care. It can help create the continuum of care and effectively manage patient care and costs to optimize quality.
Figure 3: Home Services Visits, 1988-1996; Appalachian Regional Healthcare
Components of this trend include an increase in primary care disciplines, decreased volume of services provided by specialties (though specialty care is now being recognized as more cost-effective in selected circumstances), increased nonphysician providers, especially in primary care with advanced registered nurse practitioners and physician assistants, and a continuing search for ways to create incentives for the appropriate distribution of providers to match population-based need for all services.
Reasons for this trend include cost factors, quality improvement, the clear need to have more cost-effective providers at the right place at the right time, and the necessity to maintain skill levels of all providers by actively practicing at the appropriate level of their training. Both geographic and specialty maldistributions are significant problems. We see instances in which specialists perform generalist functions for which they are not trained, while their specialty skills tend to atrophy.
This trend has huge implications for health professions education. The educational segment of the health care industry must become responsive to demographic, market, and community needs, rather than continuing to be internally driven. Also, federal incentives for health professions education perversely impact geographic and specialty distribution of providers and require modification. Provider reimbursement will be adjusted by financial incentives to achieve desired goals. Successful achievement of the changes involved in this trend will produce increased quality, improved access, and decreased cost.
Figure 4: Accredited Residents and Residents in Training: 1970-1995
The components of this trend include increasing for-profit health care, proposed cutbacks at federal and state levels in Medicare and Medicaid, and the decline of cost-shifting as a resource for not-for-profit indigent care. Reasons for this trend are numerous. Policymakers sometimes depend on managed care and for-profit models that have succeeded by excluding the disenfranchised. In addition, beneficiaries of the health "safety net" often lack political clout. Additionally, health departments have become Medicaid dependent in many cases, and Medicaid cutbacks threaten their viability as a part of the "safety net."
This trend may lead to a crisis of monumental proportions. Some not-for-profit providers could be driven to extinction by their inability to fund their charity care burden. Health care must be perceived as systemic, social, and ethical, rather than piecemeal and for-profit. Meeting the societal responsibilities of health care to all requires finding a mechanism to assure access for the disenfranchised in the emerging market-oriented system. There is clearly a role for government in resolving this potentially catastrophic situation.
Figure 5: Charity Care, Appalachian Regional Healthcare Corporation, 1988-1996
This trend clearly increases the demands for services in chronic illness and long-term care. Hence, there is a tremendous need to analyze our societal values relating to technology use and terminal care, and to define clearly the outcomes we truly desire. Only thus can the necessary outcomes be cost-effectively achieved. There is a growing move to restructure services to support living at home in preference to institutional alternatives.
This inexorable trend exerts pressure in direct opposition to market efforts to reduce the consumption of resources by the health care sector.
Figure 6: Estimates of the Older Population in Kentucky, 1995-2020
Components of this trend include AIDS, tuberculosis, antibiotic-resistant pathogens, and inevitably, yet unknown entities. The reasons for this trend include (1) the success of our health care technology, enabling the performance of many new procedures which put patients at tremendous risk, (2) population expansion, (3) behavioral choices, (4) increasing (and not always appropriate) use of antibiotics which produce newly resistant organisms, and (5) increasing frequency of immune deficiency from various therapeutic intervention. The expanding human population produces vast ecological changes (for example, species depletion, deforestation, animal population displacement) and disrupts environmental balances. We have no understanding of the long-term effects of these often irreversible events upon human infectious disease patterns.
We desperately need to develop understanding of what is happening to our ecosystem. Then, we must develop policies for enabling human populations to exist on a healthy planet. Chemicals, technology, and antibiotics must be properly used, and health care providers must be educated in these issues. We must examine the ecological impact of the human population objectively and make rational choices in the face of incalculable risk. We must look to new technology which may itself be able to produce solutions to this potentially disastrous trend.
Figure 7: HIV Worldwide Annual Incidence with Low/High Projections for Year 2000
Components of this trend include: 1) recognition that consumer satisfaction is a critical aspect of quality care; 2) increased consumer input into health care decisionmaking; and 3) assurance of community benefit for decisions made by providers.
A major reason for the emergence of this trend is significant public reaction to excesses of the market, such as the previously mentioned profits, salaries, and consumer choice restrictions. Other reasons include cost reduction by government, a higher level of attention by providers to the bottom line than to beneficence in health care, and policy level failure to examine and deal with the ethical, quality, health, and community impacts of resource allocation decisions.
The major impact of this trend is the re-establishment of understanding on the part of both provider and consumer that health care is a community-level phenomenon. Appropriate community input can, over time, effectively rationalize the health care system. Knowledgeable and positively involved individuals and communities constitute the only real solution to the complex puzzle of health care as it undergoes a revolution in today’s socioeconomic environment. Again, government has a role to play in assisting market-oriented systems to understand their responsibilities to patients, populations, communities, and "consumers."
Over the next four years, we can reasonably believe that economic forces, changing disease patterns, demographic changes, and increasing recognition of consumer and community interests will be the major factors driving change in health care. The ethics of health care, in this turbulent environment, are being aggressively challenged and require societal debate, understanding, and adaptation to favorably impact the change process. The view from the midst of the health care revolution suggests that possibly some more favorable trends lie ahead. To the extent that we understand and analyze trends and have a clear action plan for achieving our desired future state, we can work within current realities and modify existing trends for the benefit of the people of Kentucky. It will require thoughtful and extraordinary effort by policymakers and providers to reverse some established trends in order to achieve the goals of expanded access, enhanced quality, cost management, and community benefit.
Cabinet for Health Services. (published monthly). Kentucky epidemiologic notes and reports. Frankfort, KY: Author.
Health Care Forum. (published bimonthly). San Francisco, CA.
Kentucky Department for Health Services. (1995). Kentucky health interview and examination survey, 1993. Frankfort, KY.
Kentucky Hospital Association. (1996). HMO indicators 1996 and 1996 environmental assessment. Louisville, KY: Author.
The Advisory Board Company. (various dates). Rural Health Care Projects. RUI-001-001, February 1996; RHI-001-002, November 1995; RHI-001-003, May 1995; RUI-001-004, September 1995. Washington, DC: Author.
Schroeder, S.A. (1996). The medically uninsured—will they always be with us? New England Journal of Medicine, 334, 1130-1133.
University of Kentucky Center for Rural Health. (1995). County profiles and needs assessment, Good Samaritan Foundation Inc. service area (Hazard, KY). Lexington, KY: Author.
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* The author extends grateful acknowledgment to Robert Slaton, Wayne Myers, Rice Leach, and Kim Burford for their assistance in development and preparation of this chapter. Return to text.