Controlling health costs and improving population health – we cannot have one without the other.
Healthcare costs continue to outpace general inflation. PricewaterhouseCoopers recently projected a 6.5 percent medical cost trend in 2022. By comparison, the annual inflation rate for the United States was 5.0% for the 12 months ending May 2021 – the largest increase since 2008. For those of us who have health insurance coverage through our employment or have purchased coverage through a market-based exchange, we live in constant anxiety about paying more for our insurance.
Aside from having a high-cost, inefficient healthcare ‘system,’ the major source of this problem is our unhealthy population. “Upstream” environmental factors greatly impact our “downstream” health – for all of us. Upstream factors are many – primarily poor nutrition, inadequate housing and education, and low incomes – all considered to be social determinants of our health (SDOH). For discussion sake, healthy behaviors, social & economic factors and physical environment are all considered to be somewhat manageable by taking proactive (or preventable) measures – and these are lumped together as Upstream factors.
A great video about addressing SDOH from Broadlawns Medical Center can be found here.
UPSTREAM: 80 Percent is ‘Health’ Related
According to the County Health Rankings Model, as much as 80 percent of the factors that influence our health and well-being – physical environment, social and economic factors, and health behaviors – operate outside the services for which we pay hospitals and clinics. These factors are considered to be upstream, and to a large extent, can be modified and proactively managed. Conversely, only about 20 percent of our actual health outcomes is impacted by the clinical care that we pay to our healthcare providers (see diagram below).
Again, proactively staying healthy comes from determinants such as the social and economic environment, the physical environment, and each person’s individual characteristics and behaviors. This is what should be labeled, “health care.” Our health is primarily determined by our behaviors and the environment in which we live. How we live ‘upstream’ will greatly impact how polluted the ‘downstream’ will become.
DOWNSTREAM: 20 Percent is ‘Medical’ Related
In 2018, the U.S. spent nearly twice as much on medical care per person as did comparable countries ($10,637 compared to $5,527 per person, on average). These expenditures relate to the care we receive from our doctors, hospitals, pharmacies, etc. The healthcare prices we pay in the U.S. are higher because of administrative waste and because prices are naturally higher for hospitalization, physician services, and, of course, the medications we purchase. Numerous sources report this, but a good primer comes from the Peterson-KFF Health System Tracker.
The amount we spend for the “medical care” we receive downstream is different from the aforementioned “health care” found upstream. The high expenditures for medical care paid in Iowa and the U.S. is really for “sick care.” Medical care, for the most part, represents the consequences of our poor efforts upstream. If we fail to make the appropriate investments upstream to promote healthy living environments and behaviors, we eventually pay a proportionately larger price downstream. We all know how that is going for us, right?
In 2016, I co-authored a blog with Dr. Yogesh Shah, Chief Medical Officer and Vice President of Medical Affairs at Broadlawns Medical Center. The blog, “Time to Move Upstream and ‘Invest’ in our Health,” shows just how little the U.S. invests in the social determinants of health issues upstream when compared to other wealthy countries.
The Commonwealth Fund released an issue brief in early 2020 that confirms this troubling trend persists. “The U.S. spends more on medical care as a share of the economy — nearly twice as much as the average Organisation for Economic Co-operation and Development (OECD) country — yet has the lowest life expectancy, the highest suicide rates and the highest chronic disease burden and an obesity rate that is two times higher than the OECD average among the 11 nations.”
The U.S. under-invests in spending for modifiable contributors to healthy outcomes compared to other advanced countries. By under-investing in the ‘social determinants of health,’ we are relegated to pay bizarre prices for a sicker population that uses more medical care. Over decades, we unrealistically rely more heavily on our health providers to ‘fix’ our upstream shortcomings. In the U.S., reimbursement practices reward intervention – or sick care – far more than prevention. This is not an indictment on our health providers, but on our convoluted healthcare ‘system.’
In short, we grossly overspend on the downstream consequences to mask our poor investment efforts upstream.
We must look upstream to find effective ways to address the social determinants described earlier. There are pockets of health systems and states that are making attempts to alter the environments in which we live, work and play. We live in a world of trade-offs. Trading wasted care (and its associated cost) with preventive health-related strategies seems to make a lot of sense.
As our blog concluded five years ago: “Spending for the ‘right’ community measures that impact health will provide better health outcomes for Iowa and our country. Such expenditures will take time to translate into positive health outcomes but we need to start investing now. It will take cost-shifting from inefficient healthcare spending to re-allocating funds for social determinants that matter most, such as nutrition, adequate housing and education. By doing so, we will make our communities and state both healthier and more productive.”
To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.