Friday, May 27, 2011

Factors that Drive the Health Care Industry

The health care industry is the largest and easily the most complex industry in the United States. Every person at one point in their lives is touched by the system. Political factors, environmental and ecological issues, economics, social factors, and technology all play a huge role in the industry, often creating cycles of patterns or directing attention towards or away from trends and information.

Perhaps more than any other factor, and often the most overlooked, the environment and the ecological niches in which we live in have the biggest impact. Humans are more attuned to the rhythms of the earth than many of us would like to believe. Despite our modern society, these deep associations play a huge role. Weather patterns trigger cycles of aches and pains; the full moon guarantees the maternity ward will be packed solid; the seasons will cause the Emergency Department to code red because of influenza patients in the winter or injuries and accidents from kids breaking their arms and families in car accidents during their vacation in the summer. As drought and heat waves, ice storms and hurricanes sweep the nation each year, medical service crisis’s always follows. Beyond the natural environment, the ways in which we alter our environment are also challenging our health systems. Pollution chokes asthma patients and chemicals from pesticides and building materials wreak havoc on our bodies. Over-sterilization and over use of antibiotics are creating superbugs which make infection rates skyrocket. Hospitals and health systems are designed to operate at near capacity, which results in facilities that are chronically over-utilized and maxed out. Each day and week brings unpredictable challenges that simply cannot be ignored, even if our society is removed from the natural cycles of the earth.

Politics, on the other hand, is not so unpredictable; rather it is a constant battle that must be met. Legislation can change health systems and their futures of success or failure literally overnight once the dust settles after the long, hard fight. Federal legislation in particular can create and obliterate entire markets and professions. The 1996 HIPAA and 2010 Affordable Care Act both have had a deep effect on the nature of health systems. A large majority of large health facilities in the United States also participate in the Medicare system, which is constantly being reworked. Thus, health systems must always keep abreast of recent developments and plan extensively in order to ensure success of their businesses. Regulatory bodies and government policies on all levels of government, as well as the private sector, place significant limits on heath care too. Party politics and power struggles between the Republican and Democrats creates cyclical change in support of programs and funding. And an ever expanding number of lobby groups constantly work to keep things moving smoothly between government and the industry. Internationally, shifts in populations, immigration, global health epidemics, and terrorist threats all put a huge burden on the system.

Since health care in the United States is essentially big business, the economy impacts on health care can be both devastating and extremely profitable. Even though the United States health system is a reactionary system and largely removes choice when a patient is in need of services, when the economy is slow, health systems struggle to make ends meet. In hospitals, 80-90% of admissions come from the ER, so when the ER is low, hospital beds become empty. During a recession, for example, people travel less and thus have fewer car accidents. Sports funding also goes down and so fewer kids are getting sports injuries. Elective surgeries get put off and operations get delayed because patients cannot afford the co-pay. Sometimes people choose to travel to other countries for medical services instead because they are cheaper. Since most hospitals also get capital funding from endowments or bonds, both of which are interest based investments, equity can be severely impacted during recessions as well. The market also cycles with a constant new stream of drugs, research studies, and technologies. When it comes to distribution of services, there is a huge gap between wealthy communities and poor communities. Hospitals and clinics supported by insured and wealthy patients have more services, more doctors, and better equipment. The lack of insurance or quality insurance significantly impacts reimbursement rates for health systems, with the resulting cash flow problems significantly impacting services.

Societal trends are perhaps the most diverse and difficult to manage. American lifestyles are isolated, sedentary, fueled by a poor diet and lack of sleep, and are increasingly dependent upon mental energies rather than physical work. Combined, these factors put Americans at high risk for dozens of chronic diseases and mental and behavioral health challenges. As populations are aging, growing, and shifting, access to healthcare can be stressed because the services of the local health systems no longer fit the demographics of the area. Our society has a “fix it NOW” mentality and often has no time for wellness care, self care, or preventative care. Those who have chronic health conditions tax the system the most. Nearly 80% of health care resources are used to manage chronic health conditions, yet a vast number of Americans with chronic health conditions don’t even have health insurance and access to medical care. These patients not only tax the system, also rely on self-care and out-of-pocket services to manage their health. Preventative medicine, however, is opening new doors in choices about health care spending. Consumers who are insured tend to use primary care when they get sick. But those who are uninsured tend to wait until they are so sick that they need to go to the ER. Ethnic and religious factors can also impact service and care. Different cultures and ethnicities often have a different perspective and values on care and the course of treatment. Some cultures value large families, so in turn, when a family member ends up in over night care, accommodations for larger families must be made. Language barriers, companions, and interpreters can all complicate easy and speed of service. Religion, at times, can also create logistical nightmares when the need for kosher food, last rights, or specific protocols for handling the deceased for burial is at odds with normal protocol.

The media at times can also impact the system with constant updates of new studies, lawsuits, or stories of when something screwy happens, like a sponge is sewed into a patient. Fortunately, the media does not play as important of a role in health care decisions as other national issues because most people place a higher value on personal experience and opinions of family and friends. Despite this, most major health facilities will have a designated public information officer to play as intermediary with the press. Over the past few decades, health care has increasingly been branded. At one time, it was considered unethical to advertise health services. But with a change in laws, hospitals and major health facilities play off their strengths against competitors to increase revenues and retain patients. Hospitals have become highly competitive and heavily use billboards, radio and TV ads, and print media to get their message and brand image out. The increasing direct consumer advertising for medications and services further brings health decisions into the everyday lives of Americans. The increasing use of advertising, however, adds to healthcare costs, which requires an increase in patient volume, which means stronger pushes for consumer loyalty through advertising and branding.

Last, but not least, technology makes an impact on our health systems in many ways. Competing technology developments constantly produce innovations in drugs, treatments, equipment, design, and robotics. Despite intellectual property rights on drugs, treatments, and biological units like genes, which limits access, Health systems are under a lot of pressure to keep up with innovations. Ultimately, however, what makes the difference is not the innovation, but whether or not health facilities choose to embrace innovations. Those who do often see better outcomes in care and more accurate diagnosis which then leads to lower risk. It is often faster, more efficient, creates better access and communication, and precision. The replacement of technology, however, and the innovation of new solutions creates a chronic problem. How often do you upgrade? And at what point does it become a liability if you don’t? And sometimes, technology is too good. For example, imaging can now pick up micro cysts in breast tissue during mammograms that are part of the normal tissue and not necessarily a health risk. This begs the question, how early should intervention be when intervention itself may be more risky than the cyst that may or may not actually become a health risk? The actual technological innovations of healthcare are not the only technologies that affect the industry. There are a variety of technologies associated and dependent upon the health care industry, such as clinical information systems, imaging, and health billing and accounting operations. The recent and growing transition to electronic health files is somewhat “revolutionary” in the field. Many systems are struggling to make this transition. But, clinical info is critical to care and electronic records makes diagnosis and medical oversight easier and more efficient. As a benefit, electronic systems allow patients to access their own files on the internet or their doctors via a simple email.

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