IT IS TIME TO OVERHAUL HEALTHCARE SPENDING ALLOCATIONS
We spend around 18% of our GDP on healthcare, compared to an average of 10% amongst other developed nations. And yet healthcare outcomes in the U.S. are consistently below our peers. Data shows that inadequate spending on social services may be at the root of this disparity. If we combine spending on social services and healthcare, the U.S. consumes about 34% of its GDP in these categories, compared to France at 42%, Italy 37% Belgium 37%, Germany 36%, and UK 30%. We must ask ourselves: is our healthcare system overmedicalized? Two emerging schools of thought now attempt to address this issue.
The first school envisions hospitals as focused factories where people come to get “tune-ups”, and health systems concentrate on providing a small number of services as efficiently as possible. With care moving outside the four walls of hospitals and into the home, ambulatory and standalone clinics, this certainly appears plausible. Here hospitals will not think of themselves as one-stop shops and will relinquish the responsibility for providing social services support to other parts of the ecosystem.
The second school of thought encourages hospitals to evolve as “hubs” in their communities, orchestrating a wide range of non-medical social services- even housing, nutrition and transportation. By focusing on Social Determinants of Health (SDoH), it is hoped that hospitals will play a key role in reducing the need for medical care over time.
There is a good reason to advance the second model, but switching funds from clinical care to social services has many inherent challenges. For one, we do not currently have built-in financial incentives for our hospitals to play a role in prevention or to expand infrastructure in support of SDoH initiatives. But as readmission penalties eat into profits, hospitals must explore ways to be more involved in community services. Hopefully the new value-based models will create similar dynamics.
It is time to come up with novel redistribution plans where more funds are shifted towards social services support. Until then, increasing quality of our care and achieving health equity will remain elusive at best!
