HSC 6636 Issues and Trends in the Health Professions Dr. Larry West HTTP :// SYSTEMS. COHPA. UCF. EDU / LWEST Write This Down Exploration of current status,

HSC 6636Issues and Trends in the Health Professions

Dr. Larry West

HTTP://SYSTEMS.COHPA.UCF.EDU/LWEST

Write This Down

Exploration of current status, issues, problems, and future trends in the practice and education of health professions

UCF Graduate Catalog

HSC 6636: Intro to Course and US Healthcare System

2Dr. Lawrence West, Health Management and Informatics Department, University of Central Floridahttp://systems.cohpa.ucf.edu/lwest

Topics

• Healthcare as an Economic Activity• Transactions• Change (Comparative Statics)• Defining Characteristics • Major Issues and Concerns• The Roles of Governments• Course Administration“We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their healthcare.”

Barack Obama“This is a big f*****g deal”

Joe Biden



Healthcare as an Economic Activity

“The health care system in the United States encompasses a sprawling set of activities and enterprises. Using the word system, in fact, is a stretch, because in many ways the enterprise involves many actors working nonsystematically to achieve diverse aims. But like the “hidden hand” that economists claim guides our general economic system, many fundamental forces keep individual actors working somewhat in tandem to produce and maintain health in our population.”

(pp. 4-5)

* Kaiser Family Foundation: http://www.kaiseredu.org/topics_im.asp?imID=1&parentID=61&id=358



Healthcare as an Economic Activity (cont.)

• At $2.3 trillion in 2008 healthcare expenditures in the U.S. represented 16% of the GDP.*– The vast majority of healthcare was delivered by

paid economic actors• Employees and practitioners working for wages

or fees• Profit-seeking and non-profit institutions

organizing capital and labor to deliver services• We will view healthcare as an industry subject to

the same economic forces and analysis that any other industry might face

* Kaiser Family Foundation: http://www.kaiseredu.org/topics_im.asp?imID=1&parentID=61&id=358




• Economists argue that the behavior of an economic system is best explained when assuming that each participant makes decisions that provide the best payoff to the decision maker.

• Whenever the conduct, structure and perfor-mance of an industry is studied, this assumption holds the greatest explanatory power.




• For any institution or type of practitioner in the healthcare field we want to know: – What forces shaped the roles, practices, and

institutions in which they operate?– What are the decision rights each participant has?– What are the costs and benefits faced by each

decision maker for the various decisions they face? (What are the risk-adjusted “payoffs”?)

– How do decisions by one participant impose or create costs and benefits for other participants?




• Exercises– List the types of decisions that a physician will

make over the course of their career• Start even before the decision to apply to

medical school– For each type of decision list the cost and benefit

to the physician of the different possible choices



Transactions

• Economists speak of “transactions” in an economic system– Purchasing a car or box of corn flakes– Hiring an employee– Contracting for the construction of a building– Making a payment– Buying a movie ticket



Transactions (cont.)

• Transactions have “participants” or “actors”• Participants may be individuals or companies

– Companies are represented by employees or “agents”

• Name all of the participants involved in– The sale and purchase of a car– The sale and purchase of a house– A knee replacement surgery




• Transactions may be “organized” different ways• Why might a plumber go into business for

themselves or choose to work for a plumbing services company

• Same question for a respiratory therapist• Question: Why do we have companies instead of

a collection of independent contractors performing the same task?

• Same question for hospitals




• How is the business model for a hospital similar to that of a construction company building an office complex or tract houses?

• Each student name some transaction in the healthcare field than is commonly organized (provided) in more than one way.




• Participants in a transaction have “decision rights”– Legal or practical decisions that they are able to

make about the transaction• What decision does the owner of a retail store

make?• Shoppers in the store?• Patients with a diagnosis indicating surgery?



Change (Comparative Statics Analysis)

• The structure, conduct, and performance of industries (and the participating institutions and individuals) changes over time.

• Innovations, market forces, societal forces, and the regulatory environment can change the payoffs to decision makers– Decision makers are remarkably good at adapting

to changes to improve their economic outcomes– What happened to travel agents?– What happened to house calls?



Change (cont.)

• Comparative statics analysis is the analysis of how an “exogenous shock” changed the organization of transactions and even entire industries.– Why did it make sense to do things one way

before the change?– Why does it make sense to do things differently

after the change?– The difference in conduct or organization is the

impact of the change



Change (cont.)

• Comparative statics analysis can let us anticipate the impact of a change– Make managerial decisions on behalf of our

organizations– Make personal decisions– Entering the slide-rule industry in 1972 was not a

good idea



Change (cont.)

• Changes can be of different types– Technical

• New science• New organizational ideas

– Social• The aging baby boomers• Consumer taste

– Legal• Health care reform• Broader powers for Physician Assistants

Switching to the Textbook Topics



Defining Characteristics

• The Importance of Institutions for healthcare delivery

• Role of Professionals• New Developments• Tensions between “Caring” and “Business”• Dysfunctional Financing and Payment systems



Defining Characteristics—Institutions

• Why do we see the institutions that we do?– Range of sizes– Specialized delivery– Different ownership models– Different profit motives



Defining Characteristics—Professionals

• Similar Questions– Range of specializations– Increased specialization– Role of generalists– Different employment models



Defining Characteristics—Innovation

• Why have we seen the “explosion” in innovation in the past twenty years?

• Identify benefits, costs, and tensions caused by innovation.



Defining Characteristics—Tension

• What is the role of the profit motive in healthcare delivery?

• What should be the role of the profit motive?• Who decides the difference between “is” and

“should”?• Do you want cheap and crowded or expensive

and quick access?• How much of healthcare cost should be

reimbursement vs. premium payment for the value of saving your life, vision, sanity, etc?



Defining Characteristics—Payments

• Book cites 45 million Americans with no health insurance– How many are underinsured?– What is the social impact of the uninsured?– How is the government requiring you to have

health insurance economically similar to requiring property owners to pay taxes to support fire fighting?

– How is it different?• How do payment systems affect practice?



Major Issues and Concerns

• Improving Quality• Improving Access and Coverage• Keeping Costs Under Control• Encouraging Healthy Behavior• Improving the Public Health Care System• Addressing Social Determinants of Health• Strengthening the Health Workforce• Encouraging More Realistic Expectations



Major Issues—Improving Quality

• What are the costs of 44,000-98,000 deaths each year due to medical errors?

• What are the costs of preventing these deaths?• What are the costs of incorrect or incomplete

care that doesn’t lead to death?• What are the costs and consequences of

uncoordinated care between different providers for the same patient?



Major Issues—Improving Access

• “Lack of coverage is a peculiarly American problem” (p. 7)– Why do you think this is?

• What rights do/should people have to insurance and care?

• Should an individual’s lifestyle choice affect the care available to them?



Major Issues—Controlling Costs

• Costs are easy to control—just provide no services

• We could probably afford to provide every American today with top-flight healthcare as it existed in 1935. Is it good or bad that we didn’t stop there?

• Why are healthcare costs rising?• Are there components of healthcare costs that

are easier to address than others?



Major Issues—Healthy Behavior

• A nontrivial portion of healthcare is provided to people because of unhealthy behavior choices they elect. – What are the social consequences of permitting

such behavior?– What are the social consequences of prohibiting

it?



Major Issues—Improving Public Health

• What is the socially optimal level of investment in preventative health measures?

• Name recent episodes from the news where preventative systems failed leading to health and economic consequences?

• What do you think of the authors’ statement, “Perhaps because public health, when done effectively, is invisible (it avoids problems rather than fixes them), the United States has historically underinvested in public health”? (p. 8)



Major Issues—Social Determinants of Health

• Do “most Americans believe we should have an equal opportunity approach to health maintenance”? (p. 8)

• If so, why doesn’t our system reflect this belief? • How do income, class, and education directly

affect health and access to care?• How do they indirectly affect health and access?



Major Issues—Strengthening the Workforce

• Why do we see shortages of certain providers?• “The health care system must train and recruit

the large and diverse cadre of workers that are needed to run health institutions.” (p. 8, emphasis

added)– What mechanism exist to do this?– If we have a difused system (nobody is in charge)

who will make sure this happens?



Major Issues—Realistic Expectations

• “Consumers should expect and demand better quality and better efficiency from the delivery system.” (p. 9)– How can they do this?

• “People also should recognize that their health is, to some degree, their own responsibility.” (p. 9)

• How realistic are these expectations?



Prospects for Change

• We will review most of the previous issues in detail this semester

• We will be on the lookout for opportunities for and challenges to change

• “The constraints we face in making progress toward improving the service system are political and economic.” (p. 9)

• “Health care raises profound questions about what kind of country we want the United States to be.” (p. 10)



Why do we Care?

• Understanding the healthcare delivery system is critical for a number of participants– Practitioners– Policy makers– Managers– Patients– Participating companies– Non healthcare employers



The Role of Government

• Why do we have governments?– Why do we receive police protection from the

government but plumbing services from private sector providers?

– Why is so much of the education system a government activity?

• Be prepared as the course progresses to identify the current and potential roles of governments in healthcare delivery and the consequences of changes.



Course Administration

• Tour of the web site– Syllabus and grading– Schedule– Registration– Groups– What you need

• Attendance, etc.• How to succeed

Documents

HSC 6636 Issues and Trends in the Health Professions Dr. Larry West HTTP :// SYSTEMS. COHPA. UCF. EDU / LWEST Write This Down Exploration of current status,