Why the US needs a creatively rejuvenated health care system

Why the US needs a creatively rejuvenated health care system
Why the US needs a creatively rejuvenated health care system

This is a five-minute excerpt from Ezekiel Emanuel’s speech at the LDI 2024 Charles C. Leighton, MD, Memorial Lecture.

Debunking the oft-heard helpless declaration that «the US health care system is the best in the world,» LDI Senior Fellow and University of Pennsylvania Global Initiative Vice Chancellor Ezekiel Emanuel, MD, told an audience at an annual Penn lecture series that much of US healthcare is failing its patients and burning out its clinicians.

Emanuel said U.S. health care leads the world in achieving five-year survival rates for breast cancer, but that figure is a rare outlier in the country’s overall record of performance in other areas of care delivery. He also pointed to a recent Gallup poll that found a majority of Americans rate the quality of health care as «inadequate,» with 21 percent — a new high in two decades — calling it «poor.»

Relentlessly rising costs

This LDI lecture series celebrates the life and work of Dr. Charles C. Leighton, a senior executive and scientist who worked with Merck & Co. for 28 years

Meanwhile, system costs continue to rise. Currently at $4.7 trillion annually, health care spending is already greater than the gross domestic product (GDP) of both Germany and Japan, Emanuel told LDI 2024. Charles C. Leighton, MD, Memorial Lecture at Wharton School’s Huntsman Hall.

In the area of ​​population health for preventive care and treatment of hypertension and diabetes, Emanuel said, «We’re doing a miserable job with diseases that are not that complex.» He went on to paint a vivid picture of why the US health care system needs to make dramatic changes in its organization and operation.

Emanuel, an LDI senior fellow and co-director of the Penn Healthcare Transformation Institute, is also a special advisor to the director-general of the World Health Organization (WHO). He was a special adviser on health policy in the White House from 2009 to 2011 and was one of the architects of the Affordable Care Act (ACA).

«Creative Rejuvenation»

Among his other accomplishments, Emanuel has written 14 books, the latest of which is an analysis of the best and worst health care systems in the industrialized world. His presentation at the Leighton Lecture focused on the research he is currently doing for his recent 15th book, currently titled Creative Rejuvenation: A New Lens for Transforming American Health Care.

Much of his presentation made the case for why dramatic changes are needed in the fragmented and highly complex US health care delivery system:

  • The infant mortality rate is 5.5 per 1,000 live births. Among the 49 countries reporting to the Organization for Economic Co-operation and Development (OECD), 36 countries have lower infant mortality rates than the US, which has 3 times the infant mortality rate of the top performing countries. such as the Netherlands and Norway.
  • The maternal mortality rate was 32.9 deaths per 100,000 births, with African American women having a rate 2.6 times higher than white and Hispanic women. The average for OECD countries is 9.8 maternal deaths per 100,000.
  • In addition to the earlier mentions of hypertension and diabetes, US health care also performs poorly in the areas of heart care, stroke, chronic kidney disease, obesity and the rate of avoidable deaths.

A tangle of incompatible programs

A major obstacle to care efficiency and cost control over the past 80 years has been the creation of ten separate health care delivery systems, each in its own unique and increasingly complex way: employer insurance, Medicare, Medicaid, the children (CHIP), Veterans Affairs (VA) coverage, TRICARE, Indian Health Services, federal employee health benefits, ACA exchanges, and ACA Medicaid expansion.

Over the decades, every time a new population group was targeted for coverage, a brand new program was created, greatly increasing the overall complexity and fragmentation of the system. This was done as opposed to expanding an existing program to incorporate the new group into a system of standardized policies, procedures, and practices in both care delivery and payment.

«I was present at the creation of the Affordable Care Act and the expansion of Medicaid,» Emanuel said. “The eligibility requirements don’t match the income we use. Benefit levels do not match. Fragmentation and complexity add to the time, effort, and cognitive load required for a person to understand what they are responsible for. On average, ACA Exchange customers have 113 plan options to choose from. On average, Medicare beneficiaries have 60 different Part D plans. Those of you familiar with behavioral economics know that so many choices can lead to paralysis. What happens when you have too many choices? Bad choices.”

Provoking resistance to system reform

“Complexity,” Emanuel continued, “also facilitates waste and inefficiency throughout the system. You have multiple prices, which leads to high administrative costs, which leads to a lot of effort to comply with all the different requirements. And I would argue that the institutionalization of fragmentation and complexity also creates and strengthens a structure resistant to any systemic reform.

Along with the snarl of incompatible payment systems, fragmentation and complexity negatively impact quality metrics. “Each insurance company, exchange and regulatory agency has its own quality metrics. Take Medicare – they use 788 different quality metrics across 34 programs. You have fragmentation even within a single payer. Now they are trying to reduce that. It will be a very important effort, but it is a long time coming,” Emanuel said.

«Adherence to different quality metrics adds administrative costs and inefficiencies,» he continued. “I would say that also contributes to clinician burnout. We see tons of burnout. In 2023, studies found that 50% or more of doctors and nurses were burned out. If you look at all the different reasons that healthcare professionals rank, number one is administrative tasks. They have to do more and consider more things. In fact, American doctors spend at least 50% more time in the electronic health record than Europeans because we spend more time in billing.

Creative destruction won’t work

“So how do you correct sclerotic systems like this?” Emanuel asked. «Well, if you’re a business theorist, you say ‘creative destruction.’ This is the market process where innovation makes the old way of doing things obsolete. The new manufacturers are fundamentally reforming the structure of the business process, suppressing and replacing the old ways. Think of automobiles replacing the horse, digital cameras replacing film, personal computers replacing mainframe computers, electronic cars inevitably replacing internal combustion cars. We can have creative destruction in business, but we cannot have creative destruction in social systems like health care, like education, like taxes, or like housing policy. You can’t just level the playing field and then have something replace them. So I don’t think we can screw our way to a better health system.»

“My question,” Emanuel said, “is, could some form of creative rejuvenation be an alternative way to think about this in health care? Is it possible to introduce comprehensive structural changes that remove the structural defects in the entire institution, replace them with new institutional arrangements that solve persistent problems without destruction, but through some process of rejuvenation?’

The success of other countries

“Well, look at Holland, Germany and Switzerland. They have multiple insurers, but they don’t have our problems. How do they do it? What they have that we don’t have is universal coverage. They have a government mandate, standardization of benefits, deductibles, co-pays, quality metrics, etc. Yes, they have separate payers, but they have a lot of standardization that prevents fragmentation and therefore prevents an element of complexity.

«I think universal coverage and standardization is necessary. One of the questions is, is that enough here? Will it be enough? Will this develop to where we need to go? The answer to the question of what this creative process of rejuvenation would look like is what I am currently trying to answer in this project that we are discussing here today,” Emmanuel said.


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