What does healthcare "reform" actually mean?

"Reforming" healthcare refers to changing the system of how medical services are used by patients, provided by doctors and hospitals, and paid for by employers and health plans.

What's wrong with the current system?

The current U.S. healthcare system is broken. It's not really a system at all, but a collection of individual entities: hospitals, treatment centers, small medical businesses, professionals and individual support staff. Each entity has its own structure and systems that are isolated from each other.

For patients and families, the healthcare system is confusing. It can be difficult to access and many have no insurance coverage.

Our healthcare system is expensive and costs continue to rise. In 2008, the projected national cost was $2.3 trillion, more than 16 percent of our gross domestic product. That means we spend one out of every six dollars on healthcare. Health insurance for a family now averages $12,680. (1)

Poor or uneven quality of healthcare robs the system of precious resources—actual dollars and services—that could be used to expand coverage and improve results. Researchers estimate that 30 percent of healthcare spending—nearly $700 billion a year—for services that do not improve people's health.

Is there a "quality" problem in healthcare?

Across America, there are dangerous gaps between the healthcare people should receive and the care they actually receive. Compared to care in other countries, the U.S. has high-cost and low-quality care. We spend more in total and more per capita on healthcare than any other country in the world. But, the U.S. ranks 10th in life expectancy among major industrialized nations and 27th in infant mortality. (2) The United States' overall ranking is 37th in the world, lower than any other developed country.

The visible problems with our healthcare system are the soaring costs and the number of uninsured Americans. The invisible problem is poor quality that comes in three forms—underuse, overuse, and misuse.

Underuse: We do not give people the care they should get. We neglect to give them medically necessary care, or to follow proven healthcare practices, such as giving beta-blocking drugs to people who have heart attacks.

Overuse: Americans get a lot of healthcare that we know doesn't help them. We often treat people without medical justification or fail to follow equally effective options that cost less or cause fewer side effects.

Misuse: Errors are made throughout the healthcare system. Between 44,000 and 98,000 people die annually from preventable errors—more than from motorcycle vehicle accidents, breast cancer, or AIDS. (3) Some errors are human, but systems within hospitals, doctor's offices, and elsewhere can be designed to greatly reduce the risk of error and harm.

We must lift the quality of care for everyone, everywhere. The quality of care people receive too often depends on where they live or the color of their skin. This is unacceptable.

What does "quality care" look like?

Quality care is care tailored for patients that works and is safe. The federal Agency for Healthcare Research and Quality defines quality care as "doing the right thing for the right patient, at the right time, in the right way to achieve the best possible results." (4)

Quality healthcare is: (5)

• Safe. It does not injure patients; it is supposed to help.
• Effective. It is based on sound science to all who can benefit and refrains from providing services to those who cannot.
• Patient-centered. It is respectful of and responsive to patient's preferences, needs and values.
• Timely. It reduces waiting time and potentially harmful delays.
• Efficient. It does not waste resources.
• Equitable. It does not vary because of someone's race, gender, income or location.

For patients, quality care is care that works—based on the best medical research about what has made you ill and what will make you better. It is getting care when you need it, getting all the care you need, and not getting care that doesn't help you. It is safe and tailored to you. And it is delivered by professionals who respect you, communicate clearly with you and involve you in decisions about your care.

Why is healthcare so expensive?

"What do we actually pay for in healthcare today? These are the bare facts: We have over 9,000 billing codes for individual procedures, services and separate units of care. There is not one single billing code for patient improvement. There is also not one single billing code for a cure. Providers have a huge economic incentive to do a lot of procedures. They have no economic incentive to actually make us better."&mdashGeorge Halvorson, "Healthcare Reform Now! A Prescription for Change"

Healthcare is expensive because of an upside-down payment system that rewards higher volumes of services, whether or not they are warranted. More healthcare does not mean better healthcare.

Physician payment comes from the "face time" they have with patients or for procedures they perform. They get no payment for the long-term management of specific conditions or for coordinating care with other providers. The fee-for-service payment model rewards the quantity of care provided, not the quality of care given.

Why aren't all Americans covered by insurance?

In the United States, we have "categorical" health insurance coverage. This means people who fit specific "categories" are covered by a government program or get private insurance through their employer. Everyone else must purchase health insurance on their own. The "categories" include:

• Employed people, who may get health benefits from their employer.
• People over the age of 65, who are covered by Medicare.
• Some people with low incomes, but not all, who are covered by Medicaid.
  • Children up to age 19
  • Pregnant women
  • Parents (and other caretakers of children) in families with dependent children
  • People with a serious disability who are unable to work for at least one year
  • Elderly
• Some of those who don't fit into any categories, who may receive coverage from their state.

If you are a single adult male with no children, no matter what your health problems or how impoverished you are — YOU DO NOT QUALIFY FOR MEDICAID.

Who has a stake in healthcare reform?

The simple answer to this question is: Everyone. We are all consumers of healthcare and need to be educated about the issues connected to reforming the system. However, we can say there are four constituent groups who all play a role:

• Consumers (Patients and Families) who use healthcare services
• Providers (Physicians and Hospitals) who provide care
• Payers (Health Plans and Insurance Companies) who sell insurance coverage and pay for care
• Employers who provide benefits to employees and also pay for care

All stakeholders need to be at the table, engaged, and working together to make healthcare better in our nation.

What is the goal of healthcare reform?

The goal of healthcare reform is to create a high-quality, cost-effective system that is equitable in its administration, accountable to stakeholders, and gives all Americans insurance coverage options. Specific objectives include:

• Expand access
• Strengthen primary care
• Promote public reporting and accountability
• Reform the payment system
  • Focus incentives on quality and efficiency
  • Move away from the "Fee for Service" model
• Speed the adoption and implementation of Health Information Technology (electronic medical records)

What needs to be done to change and improve the system?

To improve quality, we need better information about the actual performance of doctors and hospitals. We don't always know who is doing a good job and who is not because we can't see inside the healthcare system. This means:

1. We must understand the quality of care in every community by measuring and reporting the performance of doctors and hospitals. Then we must implement strategies to help improve quality.
2. We must reward, rather than penalize, healthcare providers who successfully reduce excessive care. We must also reward providers for providing the right care at the right time.
3. Finally, we must encourage people to act like consumers when it comes to healthcare so that we can create demand for high-quality care. Patients need to become better partners with their doctors in managing their own health.

How will reform be accomplished?

Healthcare is delivered locally, but influenced by national AND local factors. Action must be taken at every level to fix it.

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