Reducing Costs in the Changing Fabric of Healthcare

Lecturer describes shift in healthcare from 1946 through the ACA
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CHICAGO—In 1946, President Truman signed the Hill-Burton Act. The Act, which was intended to launch a program that would improve the health and healthcare of Americans, offered federal funding for the construction and modernization of hospitals, nursing homes, and other healthcare facilities, provided these facilities would offer reduced-cost care to “a reasonable volume” of patients. The legislation aimed to fund the construction of 4.5 hospital beds for every 1,000 people. Currently, however, the United States has 2.5 beds/1,000 people. That said, the number of beds can vary a great deal from state to state. Pennsylvania, for example, has 2.7 beds/1,000 people, while California has 1.8 beds/1,000 people.

Jonas T. Johnson, MD, professor and chair of the department of otolaryngology in the University of Pittsburgh School of Medicine in Pennsylvania, delivered the Joseph H. Ogura Lecture during the 119th annual meeting of the Triological Society, held as a part of the Combined Otolaryngology Spring Meeting. He described the shift in the healthcare landscape from 1946 to the Affordable Care Act (ACA) and made predictions for the future of healthcare. He began his presentation not by calling out California for having too few hospital beds but rather by stating, “We’re overusing healthcare in western Pennsylvania compared with other regions.”

The world of healthcare has changed a great deal since President Truman signed this legislation. The new landscape includes modern technology, accelerating costs, failing hospitals, and evolving practices. Physicians continue to specialize and yet, while there are, as Dr. Johnson explains, “hospitals everywhere,” fewer specialists are available to staff them. In fact, he said, the United States currently has one ear, nose, and throat physician for every 35,000 people and one head and neck surgeon for every 125,000 people.

Jonas T. Johnson, MD,
delivers the Ogura Lecture.

Medical spending is growing rapidly and, “Of course, most of the spending tends to be at the end of life,” said Dr. Johnson. This has led to the introduction of the value equation. While the old paradigm of healthcare delivery focused on volume, the new paradigm centers around value (quality divided by cost). This means that “we will be increasingly penalized for related readmissions,” said Dr. Johnson, adding that value will be driven by factors such as customer satisfaction. “These are changes that we are going to have to live with.”