Description
Book SynopsisProvides a diverse, multi-faceted approach to health care evaluation and management
The U.S. Health Care System: Origins, Organization and Opportunities provides a comprehensive introduction and resource for understanding healthcare management in the United States. It brings together the many moving parts of this large and varied system to provide both a bird''s-eye view as well as relevant details of the complex mechanisms at work. By focusing on stakeholders and their interests, this book analyzes the value propositions of the buyers and sellers of healthcare products and services along with the interests of patients.
The book begins with a presentation of frameworks for understanding the structure of the healthcare system and its dynamic stakeholder inter-relationships. The chapters that follow each begin with their social and historical origins, so the reader can fully appreciate how that area evolved. The next sections on each topic describe the curr
Trade Review
Students of American health care’s history, structure, organization, management, regulation, and financing face a daunting challenge, confounded by the complexity and scale of that industry. Until now, a modern comprehensive source book covering all of that terrain and more has been missing.
The wait is over. In The U.S. Healthcare System: Origins, Organization, and Opportunities, Professor Joel Shalowitz has provided a stunningly ambitious compendium with an unequaled combination of both scope and detail. It covers both the current shape and the historical background of payment, classical and emerging organizational forms, professional roles, regulation, technology, efforts to measure, control, and improve the quality of care, and more. It takes deep dives into the epidemiology of both disease and the utilization of care – important scientific foundations for proper health care policy and management. Throughout it makes generous use of helpful figures and tables, as well as copious citations that mark this as a work of authentic scholarship.
Professor Shalowitz’s book is a must-have resource for the library of any health care scholar who wants to have ready and efficient access to the fundamental facts that shape American health care today.
Donald M. Berwick, MD, MPP
Former CMS Administrator
Professor of Health Policy and Management, Harvard School of Public Health
President Emeritus and Senior Fellow, Institute for Healthcare Improvement, Boston, Massachusetts
For anyone who picks up Joel Shalowitz’s book, The U.S. Healthcare System: Origins, Organization, and Opportunities, do NOT make the common mistake of skipping the prefatory material. The first two paragraphs of the “Foreword” (p. xxi) are worth the price of admission. As far as I am concerned, anyone teaching or taking an introductory survey course on our healthcare system needs to embrace and internalize the nuggets of wisdom here, obviously gleaned over thirty years of laboring on this topic.
What are some these nuggets? First, we do not have a healthcare system. Rather, we have a series of inter-related parts that are not aligned in their goals and incentives. That means the parts don’t work together and are not meant to work together. What that means is abandon efforts to try to “align the incentives” of all the parties using payment changes and structural models; the divides go deeper than this. The lack of a system also means that the parts impact one another in sometimes opaque ways. This means that efforts to change this monster with simplistic, top-down programs that only address one part are likely to fail. Trying to get all parties to participate in some reform might resemble the idealistic scene depicted in Edward Hicks’ painting, “The Peaceable Kingdom” (with William Penn in the background!).
Second, there is nothing new in our healthcare system. As Yogi Berra reputedly said, “it is déjà vu all over again”. Many of the problems we are trying to tackle today (improving quality, increasing access, controlling cost increases) are similar to problems we have tried to tackle in the past. The fact that we are still tackling them - - without realizing that we have been down this road before, unsuccessfully - - should send out warning signs to everyone. These problems are intractable. The only problem is that managers, policy-makers, and students of U.S. healthcare don’t know the history and the lessons learned from the last time we tried to tackle these issues, and thus don’t know (to quote an old management text) “the ropes to skip and the ropes to know”.
These words are meant as praise for what Joel Shalowitz has achieved in this hefty tome. He takes nearly 700 pages to (a) present several important frameworks for understanding the U.S. healthcare system, (b) trace the history of this system, and (c) present the relevant fact base on its major sectors - - but with an emphasis on “understanding” how this system really works (or doesn’t work). Unlike other introductory texts, Joel has avoided the mindless presentation of statistics and charts. I do not think those help anyone; moreover, it is boring. Instead, his book is designed to be thoughtful and thought-provoking - - i.e., to help improve your critical thinking about our healthcare system through some important lessons.
The lessons come quickly in this book. Chapter 1 introduces the reader to the three main policy goals pursued by the U.S. (and every other country) for decades: higher quality, improved access, and restrained rate of growth in healthcare costs. This framework needs to be on everyone’s learning agenda, since every country endorses it as their strategic aim (but have not yet solved it). Joel immediately gets to the task of explaining what each of these complex goals consists of - - not an easy task, since they are multi-dimensional in nature. More importantly, he correctly (I think) characterizes this tripartite set of goals as inherently contradictory and involving tradeoffs in their accomplishment. This will come as unwelcome news to many people who want to have it all and/or do not want to make tough choices. This is critical thinking that challenges many widely-held beliefs.
Chapter 1 also introduces you to the many stakeholders in the U.S. healthcare system. This analysis should sober readers that “alignment” - - one of the most overused words in our field - - is going to be difficult given the plurality of interests involved. Anyone one who has studied plural societies (those with many, different ethnic or religious groups) should understand the difficulties of bringing all parties together for a common goal. Indeed, one of the strengths of this book is to emphasize the presence of stakeholders and their plurality in our healthcare system. Their mere existence tells the reader that, as far as “alignment” goes, “we have trouble in River City”. Efforts to cut costs in one area of healthcare are likely to “gore someone else’s ox” (e.g., income) and therefore be opposed and perhaps thwarted.
And this is just the Foreword and Chapter 1! I could go on further about why this book makes an enormous contribution. Chapters 2 and 3 deal with epidemiology - - a topic worthy of a physician author, but also important for an MBA business school audience that is interested in marketing (the managerial version of epidemiology). This should come as no surprise since Joel has co-authored another major text with Phil Kotler. Subsequent chapters (4 and 5) deal ably with the two biggest sources of spending in our healthcare system: hospitals (and hospital systems) and healthcare professionals. Chapters 6-8 then cover the multitude of payers, the multitude of technologies that need to be paid for, and (in particular) the advances in information technology. The final chapter does a deep-dive into the whole issue of quality - - how to measure it, how to manage it, and the tradeoffs necessitated in doing so.
I should acknowledge my biases. Like Joel, I have been teaching an introductory survey course on the U.S. healthcare system for over 30 years. It may take us that long to really appreciate what working in this non-system means. And, like Joel, I believe an understanding of the history of the system is important for anyone trying to work within it, let along trying to change it. And, like Joel, I have labored at this task in major business schools trying to teach MBA students about the importance of this all. So, I am already predisposed to like this book. I wish I had written it.
Lawton R. Burns, PhD, MBA
James Joo-Jin Kim Professor; Director, Wharton Center for Health Management and Economics; and
Chairperson, Health Care Systems Department, Wharton School, University of Pennsylvania
The U.S. Healthcare System: Origins, Organization and Opportunities is a tour de force— a must use textbook for those seeking to solve the problems of the U.S. health care system.
It discusses each of the major stakeholders in an accessible, detailed, and authoritative voice and presents a compelling framework for understanding how they function.
Coupled with Professor Shalowitz’s daily blog, https://www.healthcareinsights.md, which discussed current healthcare issues, this book will make for the lively, informed discussions that students of U.S. healthcare have been looking for.
Regina E. Herzlinger, PhD
Nancy R. McPherson Professor of Business Administration, Harvard Business School
This remarkably well-documented text provides important information and knowledge about the U.S. healthcare system within the context of historical developments and interpretative frameworks. The chapter on Managerial Epidemiology distinguishes [the book] from many other texts in the field, and there are particularly strong chapters on Payers, Technology, and Information Technology. The text will help readers understand and navigate the complexity of the U.S. healthcare system, why it has developed the way that it has, and some of the implications for its future evolution.
Stephen M. Shortell, PhD, MBA, MPH
Distinguished Professor of Health Policy and Management Emeritus
Dean Emeritus School of Public Health
University of California, Berkeley
No matter if you’re a seasoned executive or just entering the health care workforce, this book provides critical context about the history of care delivery and payment methodologies. This understanding is essential as we consider our health care future as a country, and the author has some fascinating ideas about possible paths forward for our industry.
Susan Turney, MD, MS, FACP, FACPME
CEO of Marshfield Clinic Health System
To anyone who wants to really understand the U.S. healthcare system, Dr. Shalowitz’s book is a “must read”. Having participated in the healthcare industry for 40 years, this is the first time I have found a book that is comprehensive, factual and well-written.”
Harry Kraemer, Jr., MBA
Former Chairman & CEO, Baxter International
Clinical Professor of Leadership, Kellogg School of Management, Northwestern University
Executive Partner at Madison Dearborn Partners
Table of ContentsList of Exhibits xiii
Foreword xxi
Acknowledgments xxiii
One: Understanding and Managing Complex Healthcare Systems 1
Definitions 2
Health System Structure and Features 7
Who Pays? 8
How Much Is Paid? 11
Who and What Is Covered? 12
Where Is Care Provided? 13
Who Provides the Services and Products? 14
Strategic Planning 17
Stakeholders 17
Health System Trade-offs and Value Propositions 20
Putting It All Together 30
Summary 32
Two: Determinants of Utilization of Healthcare Services 33
Reasons Stakeholders Seek Healthcare 34
Patient Characteristics That Influence Care-Seeking 36
Age 37
Gender/Sex 37
Race 39
Income 41
Social Status 42
Education 43
Culture and Beliefs 44
Multifactorial Causes 46
Reducing Patient Demand for Healthcare 47
Increase Out-of-Pocket Expenses 47
Prevention 51
Eliminate/Reduce Risky Behaviors 51
End-of-Life Issues 52
Healthy Lifestyle Promotion 54
Consumer Behavior—Healthcare Market Segmentation 54
Provider-Induced Demand for Healthcare 56
Local (Small Area) Variations 61
Summary 63
Three: Managerial Epidemiology 65
Introduction 66
What Is Epidemiology? 66
Why Is It Important to Learn about Epidemiology? 66
Definitions and Uses of Principles 67
Morbidity and Mortality 67
Incidence and Prevalence 67
Validity 67
Reliability 68
Sensitivity, Specificity, Positive Predictive Value, and Negative Predictive Value 68
Clinical Study Designs 70
Case Control Studies 70
Problems with Observational Research 72
Benefits to Employing Observational Research 73
Cohort Study 74
Randomized Controlled Trial 78
Summary 80
Four: Hospitals and Healthcare Systems 81
A Brief History of Western Hospitals 82
American Hospital Expansion in the 20th Century 88
Hospital Definition and Classifications 94
Definition 94
Ways Hospitals May Be Classified and Special Related Issues 96
Hospital Inpatient Payment Methods 137
Organized (Integrated) Delivery Systems/Accountable Care Organizations 139
Origins and Definition 139
Eligibility 143
Financial Arrangements 143
Hospital Governance 153
Definition and Purpose 153
Legal Requirements 154
Responsibilities 156
Board Structure and Activities 159
Summary 161
Five: Healthcare Professionals 163
Physicians 164
History of Western Medical Care 164
History of American Medical Care 177
Current Status of Medical Training 190
Licensure 197
Shortage of Physicians 199
Employment Status 204
Summary 206
Nurses 206
Registered Nurses 206
Nurse Practitioners 208
Nurse Anesthetists 209
Midwives 210
Education and Certification 212
Physician Assistants 213
Education and Certification 214
Physician versus NP/PA Care 215
Summary 216
Six: Payers 219
Principles of Health Insurance 220
The Loss Must Have Some Nontrivial Value Upon Which Both Insured and Insurer Agree 222
The Peril Must Occur Randomly and Be Out of the Control of the Insured 222
The Event Must Occur Neither Too Frequently Nor Too Rarely 225
The Insurer Must Be Able to Write Large Numbers of Contracts to Indemnify Similar Risks 226
Background and Current Status of Health Insurance in the United States 229
Private Health Insurance 229
Medicare 264
Medicaid 318
Children’s Health Insurance Program: Social Security Title XXI 335
Other Federally Sponsored Programs 337
Managed Care 357
Principles 361
Quality and Safety 361
Summary 381
Seven: Healthcare Technology 385
Definition and Frameworks for Study 386
Major Trends in Healthcare Technology 388
Safety 388
History of Safety Problems and Corrective Legislation 390
What Is Substantial Equivalence 404
When a 510(k) Is Required 404
Bringing Healthcare Technology to Market 435
Evolving Industry Structure 438
Globalization 444
Generics 444
Specialty Pharmaceuticals 446
Patents 453
Genomics and Precision Medicine 453
Disruptive Innovation 458
Healthcare Technology’s Contribution to Costs by Stage of Care 460
Overview 460
Quality-Adjusted Life Years 460
Core Cost Issues 462
Prevention 463
Screening 464
Diagnosis 464
Treatment 466
Other Considerations 470
Religious Issues 470
Ethical Issues 470
End-of-Life Costs 471
Media’s Role in Increasing Technology Costs 472
Malpractice and Defensive Medicine 473
Summary 474
Eight: Information Technology 475
Introduction 476
Definitions 477
Background and Key Issues in Health Information Technology 479
Collection, Classification, and Ordering of Data 479
Terminology/Coding 486
Interoperability 492
Lessons Learned 529
Challenges 529
Sustainability 529
Certification 534
Privacy and Security of Information 537
Management Considerations 547
Other Issues and Trends 549
Summary 563
Nine: Quality 565
Introduction 566
History of Healthcare Quality and Development of Key Concepts and Institutions 567
Ancient Origins 567
1900–1950 568
1950–1970s 574
1980s and Total Quality Management 580
1990s 589
2000–2010 592
2010–Present 605
Quality of Care and the Public’s Health 623
The Centers for Disease Control and Prevention 623
Healthy People 626
Definition of Quality 630
Key Questions for Successful Evaluation and Implementation of Quality Measures 632
Choosing Standards 633
Monitoring Standards 637
Evaluating Results 639
Volume/Quality Relationship 644
Managing Quality Improvement 646
Value Propositions 646
Cost–Quality Trade-off 648
Cost–Access Trade-off 648
Quality–Access Trade-off 649
Summary 649
Index 651
