Healthcare in the United States: Where We Have Been, Where We Are Going
The current healthcare crisis in America is not one that happened over night. It is one that has been building for more than a quarter century. There was a time in America when healthcare was a stellar institution: research, cures, technological advances, and treatments. The focus of healthcare was maintaining and improving the quality of life. Then, during the early 1980s, managed care became an entity between the physician, the patient, and the healthcare provider of hospital services. It began subtly, but has, today, become one of the most aggressive and successful business ventures of our time; and it has been the unmaking of a once stellar and progressive American institution.
Managed care is a "distinctly American" product (Birenbaum, 1997). It was legislation introduced by the Nixon Administration with the intent to regulate healthcare and to maintain control over what were perceived as escalating healthcare industry costs (Conover and Wiechers, 2006). The Act successfully eliminated the barriers that health management organizations had encountered in state laws by "pre-empting . . . all state laws or regulations that posed a barrier to HMO formation (even if there was no direct conflict with the federal regulations) (Conover and Wiechers, p. 1)." At first, as managed care asserted itself it was subtle, giving providers, physicians, and insured individuals the opportunity to acclimate their selves to a new industry entity that had auspices over access to care and services. It required pre-authorization of services, which meant that insured had to contact a case manager, often not a physician or even a registered nurse, but a licensed practical nurse, and in the case of psychiatric care, a therapist or counselor (this changed as challenges to qualifications arose).
Arnold Birenbaum (1997), an economist and expert on health care explains managed care this way:
"Managed care defies our common-sense understanding of value in the world of work and in the area of healthcare . . . Economists in the nineteenth century believed that all work can produce something of value. Usually, the more we do, the better off we are. Thus, more value is added to what we produce . . . Managed care is a unique form of healthcare delivery because it is premised on the idea that often, in medical care, less is more. What produces value in managed care is a good health outcome rather than medical intervention. Not every visit to a doctor is necessary; nor is every test conducted, every medication prescribed, or every placement in an intensive care unit going to produce an effective outcome. Ideally, medicine should be ruled by rationality and efficiency in the choice and implementation of evaluations and treatments (p. 14)."
The implications of the managed care model is that not every condition has a cure, and if the condition does not have a prognosis for full recovery, then the treatment offered the patient should be consistent with the degree to which the patient will fully recover; and if there is no recovery, there should be no treatment. This philosophy is, and was especially then, an abrupt departure from the philosophy that premised healthcare in America until the onset of managed care. Before managed care, the philosophy of healthcare was that physicians and healthcare providers would provide all available services to individuals to maintain and improve their quality of life. Managed care is not conducive to this philosophy.
It is clear that most Americans today do not understand the implications of managed care. Indeed, managed care is more than a quarter century old, and in that regard most of the people who are insured under group benefit plans today have no experience with, or history of healthcare in a pre-managed care environment. They do not know or understand how their healthcare is being manipulated for purposes of corporate profit. They do not know that healthcare in America was once something that existed as decision making between a physician and a patient, and that the decisions the patient and his or her physician made about healthcare treatments and services afforded them a wide range of choices that were available to them through the patient's group benefit contract through an employer-based health insurance product. It is the choices and the physician-patient relationship that have been eliminated in today's healthcare environment by managed care.
Most employer-based healthcare plans offer the same benefits, and are legally required to provide certain products, such as mental health care and services, within the same payable limits as any other medical condition. Today, however, the cost of services and care has been dramatically shifted from the insurance company, to the insured. Most people have deductible, which they understand well, because they deal with those in other insurance products; but they also have co-pays that were once limited, but today are not.
Where once the copayments were general, today they are service unique, meaning that every individual service from lab tests to nuclear medicine, to outpatient, and inpatient care has individual line item and unlimited copayments. Additionally, with managed care oversight, even though particular services are part of the employer-employee group benefit package (insurance plan), managed care pre-empts access to those services, often prohibiting access, or denying payment for services for failure to contact and follow-up with managed care case workers, thereby shifting the cost for full services directly to the insured-patient, or penalizing the healthcare provider with non-payment for services and causing the healthcare provider to absorb the costs of services (Birenbaum, 2002).
We immediately saw the impact of managed care once it began moving forward in a business mode. Withholding of payment and denial of payment for services rendered had an adverse impact on hospitals and other providers, as well as consumers. The impact is described in a U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, and National Center for Health Statistics report (Bernstein, A.B., Hing, E., Moss, A.J., Allen, K., Siller, A., and Tiggle, R., 2003, vii). The report attributes changes in healthcare trends, and acknowledges managed care's role this way:
"The growth of managed care and payment mechanisms employed insurers and other payers in an attempt to control the rate of heath care spending has also had a major impact on health care utilization. Efforts by employers to increase managed care enrollment, as well as major Medicare and Medicaid cost containment efforts such as the Prospective Payment System for hospitals and the Resource-Based Relative Value Scale for physician payment, created incentives to provide services differently; for example, the increase in capitated payment and the use of gatekeepers has been associated with a changing mix of primary care and specialty care (see "Visits to Primary Care and Specialty Physicians) (5). Numerous other factors also influence the type and amount of health care utilization that is provided in the United States (see "Forces that Affect Overall Health Care Utilization") (6, 7) (Bernstein, A.B., Hing, E., Moss, A.J., Allen, K., Siller, A., and Tiggle, R., 2003, vii)."
The impact that is spoken about in the above paragraph is one that did not evolve in keeping with the payment systems instituted and managed care procedures and processes. Indeed, it was slow to adjust to these new "incentives," and the provider response was multi-faceted: hospital closings, staff cuts, support service changes in provider locations, the rise of corporate for profit healthcare, the shift to the insured for the cost of services, and the directed path of patients to specific providers and physicians who were in keeping with the philosophies of managed care thereby offsetting the capitated and Resource-Based Relative Value Scale decreases in payment by patient volume (Birenbaum, 2002, p. 55).
These were, for the most part, negative impacts on patients and on the healthcare delivery system in America. Understaffing in hospitals was another response, and there are innumerable cases of law suits and issues associated with the current practice "flexing" staff with the patient census. That means when the patient roster increases, the hospital increases the number of nurses on duty, and decreases them when the patient roster declines. The problem with this is that it also lead to creative hiring and payment schemes that allowed for the flexing of professional staff. When people invest their time and money for education in a given profession and cannot count on that profession to be consistent and in their financial stake, the result is they leave the profession or take their professional skills to different types of jobs not necessarily associated with the direct delivery of care (school nurse, managed care case manager). Creative scheduling and pay arrangements have created shortages in nursing. It is not uncommon today to find emergency medical technicians (EMTs) and licensed practical nurses in emergency rooms. As the need to hire more registered nurses and other professionals for purposes of gate-keeping and managing patient cases increase, the loss of nurses began to impact hospital and other provider operations.