Disaster Planning and Preparedness

Since 2000, the United States has faced a collection of disasters and emergencies that have shaken the nation and challenged the health care sector to reconsider how it prepares for the worst. Some of the most notable disasters were the terrorist attacks on September 11, 2001; Hurricane Katrina in 2005; and the H1N1 influenza outbreak in 2009. Collectively these events revealed weaknesses in the infrastructure of delivery organizations and communication across the disaster preparedness community network, and the health care sector and its members have learned from the past successes and failures of providers' emergency responses. Over the past decade, industry, government, and individual health care organizations have gained a better understanding of the importance of disaster preparedness and now stand better equipped to face future threats (Inglesby, 2011; Sauer et al., 2009). At the same time, such events have also highlighted the importance of a health care delivery system that promotes primary care, emphasizes prevention and wellness, ensures access to necessary care, and harnesses the latest health information technology (Lurie, 2009).

Scrutiny of Business Practices

The decade also witnessed heightened concern about business practices across health care organizations. Such practices include compensation of health care executives, direct-to-consumer advertising by pharmaceuticals and medical device companies, hospitals' aggressive billing tactics, and nonprofit hospitals' provision of community benefits and charity care in exchange for tax exemption. From discovery of fraudulent behavior at HealthSouth and Tenet Healthcare to government probes into business practices at HCA and Select Medical, some of the biggest health care organizations have had to defend their conduct, repair their reputation, and assure the public that patient care, not patients' dollars, is their first priority.

Consolidation into Systems and Clusters

The consolidation of freestanding hospitals into multihospital systems during the 1990s has been well documented, serving as an example of widespread horizontal integration throughout the hospital industry. At the turn of the century, health services researchers began to evaluate the impact of such consolidation, finding that the benefits of horizontal integration included improved financial standing and performance for hospitals, while negative effects included consolidated market power and increases in prices (Bazzoli et al., 2004a; Cuellar and Gertler, 2005). Some industry observers called for increased examination of hospital systems organizing at the local market level, including subsystems of national hospital chains (Luke, 1991 2006; Cuellar and Gertler, 2003). These local hospital systems, also referred to as clusters, were observed to strategically dominate their markets over the course of the decade, becoming the main health care organizational entities at the local level. Despite their power, their impact on efficiency and quality of care has remained in question. Cuellar and Gertler (2005) found that hospitals' consolidation into local systems failed to improve the efficiency or quality of care delivered, although Luke, Luke, and Muller (2011) later observed some evidence of steps toward improved quality and coordination while acknowledging much room for improvement. Notwithstanding the emergence of local hospital-based clusters as a prevalent organizational form, these entities have been understudied to date, and more research is needed to assess their characteristics, performance, and impact on markets and patient outcomes (Sikka, Luke, and Ozcan, 2009; Luke, 2006).

Health Care Financing and Reimbursement Trends

The first decade of the century also witnessed dynamic perspectives and practices about how health care should be financed and reimbursed. At the turn of the century, industry observers declared “the end of managed care” as a strong public backlash grew out of widespread criticism and distrust of managed care's control of access to services (Mechanic, 2001; Robinson, 2001). Despite evidence of its economic effectiveness, managed care failed in large part due to its dismissal of patients' preferences. As a result, insurers' attention quickly turned toward the consumer and ways to influence consumer behavior (Robinson, 2004).

Consumer-directed health plans (CDHPs) emerged as the next highly touted product design, attempting to control rising costs while preserving patient discretion. These plans typically combined high-deductible insurance policies with health savings accounts (HSAs). Although CDHPs enjoyed strong interest and the support of the George W. Bush administration, others feared potential consequences, including the aggravation of socioeconomic, racial, and ethnic disparities in the US health care system (Bloche, 2007), as well as the promotion of commercial ethics over professional ethics in the patient-physician relationship (Berenson and Cassel, 2009). Some also expected CDHPs to move the US health care system further toward personalization and privatization (Robinson, 2005). Following their introduction, evidence of the impact of CDHPs on medical spending was mixed, with some findings revealing reduced costs (Buntin et al., 2006; Lo Sasso, Shah, and Frogner, 2010) whereas others yielded little support for an association between CDHPs and lower expenditures (Feldman, Parente, and Christianson, 2007; Buchmueller, 2009). Mixed results were also obtained in terms of CDHPs' impact on quality of care (Buntin et al., 2006). Robinson and Ginsburg (2009) suggest that the story of consumer-driven health care mirrors that of managed care in the 1990s, noting that as the first 2000 decade progressed, CDHP forms were altered from their original vision and evolved to the point where they failed to meet supporters' ultimate aspirations while avoiding the realization of detractors' worst fears. Today, preferred provider organizations (PPOs) are the most popular health insurance product and combine ideals from both managed care and consumer-driven health care (Christianson, Ginsburg, and Draper, 2008; Robinson and Ginsburg, 2009).

Advances in Technology

Each generation and each decade experiences what it believes is “technological revolution.” Change that occurs because of technological progress is not unique to any single period of time. Yet each epoch has its unique advances. In the first decade of this century, the health care sector experienced enormous increases in Internet use, particularly in consumer access to information and health education. Any number of Internet-based sources of hospital and health plan performance developed, notably The Centers for Medicare and Medicaid Services Hospital Compare program (www.hospitalcompare.hhs.gov/).

Technological advancements brought change not only to patients' behaviors and their access to information; health care providers were profoundly affected as well. Physicians' and hospitals' investments in computerized physician order entry, electronic prescribing, electronic medical records, and electronic health records increased throughout the decade, all with the goal of improving care quality, reducing medical errors, and easing clinicians' administrative workload. Remote patient management is another heralded technology allowing health care professionals to monitor patients' health status outside the clinical setting, helping to improve chronic disease management, reinforce patients' self-care, and reduce medical expenses (Coye, Haselkorn, and DeMello, 2009). Internet developments such as interactive websites, stealth ads, and social media have transformed how health care organizations interact with health care consumers, and vice versa. Examples include the use of technology to engage in consumer-driven marketing (Rooney, 2009) as well as the utilization of social media sites (e.g., Facebook, Twitter, Wikipedia, blogs) to help manage patient care and enhance communication (Hawn, 2009).

Mobile technology and high-tech devices such as smart phones and tablets were quickly adopted over the first decade of the 2000s, changing how physicians and clinicians communicate with one another and allowing instant access to e-mail accounts, medical and drug references, and the latest medical research (Gamble, 2010). Today increased connectivity means that no hospital is an island, as technological advancements have ushered in the means for organizations and individuals to communicate with one another effectively and frequently regardless of distance. Efforts to promote health information exchange, in which health information technology is used to share clinical information among health care organizations, have intensified and become an integral component of designs to improve the safety, quality, efficiency, and effectiveness of patient care (Sicotte and Pare, 2010). Health information exchange also facilitates and improves the reporting, investigation, and communication of information related to public health (Shapiro et al., 2011). Perhaps the most defining example of efforts to encourage health care organizations' adoption of health information technology is the HITECH Act's combination of monetary incentives and penalties connected to the implementation and meaningful use of health information technology such as electronic health records. The Congressional Budget Office estimates that by 2019, such measures will have caused a quarter of all physicians and hospitals to adopt electronic health records that would not have done so otherwise (Sunshine, 2009).

Just as technological progress is experienced by each generation, technological transformation is also accompanied by both the problems it solves and those it creates. Touted benefits of health information technology include improved quality, efficiency, safety, coordination, and continuity of care, as well as eliminated redundancies and reduced costs over time. But health information technology requires considerable upfront costs and training, can give a false sense of security and privacy, creates susceptibility to productivity loss in the event of information system failure, and may prompt reduced human interaction between clinicians and patients in some instances. Without sufficient time, resources, or coordination during implementation of electronic health records, their utilization may not be effective or safe, even jeopardizing patient confidentiality and medical information security. In considering whether they should embrace and acquire new advanced technologies, health care organizations are also confronted with considerable uncertainty in the timing of their acquisitions, recognizing the rapid rate of technological development and obsolescence.

In addition to advances in information technology, the health care community witnessed tremendous advances in science during the past decade, perhaps most evident in human genomics and the promise of how personalized medicine could transform how care is provided and received. The sequencing of the human genome has aided researchers in connecting specific genes to disease and drug response. This has translated to personalized medicine as genetic and pharmacogenetic testing allows identification at the genetic level of the individual patient's exact disease or susceptibility to a particular disease, the best treatment or therapy that targets and treats the specific disease, and the most appropriate medications that an individual's body will best respond to (Aspinall and Hamermesh, 2007; Burke and Psaty, 2007). Such possibilities have generated considerable excitement for how personalized medicine may improve the safety, efficiency, and efficacy of health care. At the same time, numerous scientific, regulatory, and policy challenges stand in the way of the continued march toward personalized medicine, and observers express frustration regarding its slow progress (Hamburg and Collins, 2010; Aspinall and Hamermesh, 2007).

Heightened Emphasis on Quality

At the turn of the century, the Institute of Medicine (IOM) released two groundbreaking reports, To Err Is Human (1999) and Crossing the Quality Chasm (2001). These reports highlighted the glaring failures of the US health care system in providing uniformly quality care, and they proposed that future reforms should aim to ensure that care is safe, effective, patient centered, timely, efficient, and equitable.

The years following these reports' publications have observed a heightened emphasis on quality throughout the health care sector, including increased examination of patient safety issues among health services researchers (Stelfox et al., 2006), as well as an intensified conversation among health care professionals, organizations, policymakers, and even the general public that has shifted attitudes and established a foundation for improving quality (Leape and Berwick, 2005). One may point to myriad recent efforts to fuel quality improvement in the US health care system: an increased focus on practicing patient-centered care and evidence-based medicine; improved training for health care practitioners and more stringent work hour restrictions for resident physicians; advanced use of Consumer Assessment of Healthcare Providers and Systems surveys; increased promotion of preventive care and patients' roles and responsibilities in improving their health; focused programs relating to quality improvement at both the national (e.g., the National Strategy for Quality Improvement and the National Committee for Quality Assurance certification programs) and local (e.g., the Beacon Community Program and the Robert Wood Johnson Foundation's Aligning Forces for Quality, Transforming Care at the Bedside, and Hospital Quality Network initiatives) levels; and initiatives that have made quality and patient safety more of a financial imperative for hospitals and providers, including public reporting of quality measures, pay-for-performance programs, more demanding accreditation standards, and withheld reimbursement for “never events,” largely preventable incidents judged as inexcusable should they happen (e.g., surgery performed on the wrong part of the body).

Efforts not only to improve quality of care but also to transform the culture of quality throughout the health care sector present a monumental challenge. Despite the long list of examples emphasizing quality improvement, many observers have expressed frustration at the slow rate of progress in realizing quality improvement during the past decade (Wachter, 2010; Leape et al., 2009). Recent legislative efforts such as elements of the American Recovery and Reinvestment Act and PPACA that promote use of health information technology, expand funding for patient safety research, and promote accountable care have sought to advance quality improvement efforts, yet fears persist that these efforts are largely ceremonial and will fail to truly achieve quality improvement (Pauly, 2011). A number of recent studies point to convincing reasons for such skepticism. Consumer surveys indicate that many patients' understanding and conceptions of quality care and evidence-based medicine differ from that held and promoted by policymakers and providers (Carman et al., 2010). Research suggests that the design of pay-for-performance schemes is critical to their effectiveness (Lindenauer et al., 2007; Rosenthal and Dudley, 2007); without proper design, these programs may fail to improve quality and may even exacerbate health disparities (Hasnain-Wynia and Jean-Jacques, 2009; Lindenauer et al., 2007). Others are concerned that despite good intentions, public reporting is not truly effective because consumers do not value it, for reasons including that such reports are difficult for patients to understand, fail to include desired measures of quality, or results are not effectively disseminated and promoted (Hibbard, Greene, and Daniel, 2010; Sofaer, 2010).

In order to transform a provider-centered health care sector into one that is patient centered, the design of new health care models must include features that patients, not just health care providers and payers, support and value (Bechtel and Ness, 2010), and health care organizations must exhibit strong strategic leadership to generate acceptance among health care staff and shift the organizational focus to patients' perspectives (Luxford, Safran, and Delbanco, 2011). As frustrations persist that the United States continues to spend more on health care that is average in outcomes and lacking in equity, those anxious for quality improvement efforts to quickly bear fruit are reminded that “quality improvement is a marathon, not a sprint” (Clancy, 2011, p. 405).

Changing Environment for Physicians

For physicians, change and uncertainty seemed to be constant themes throughout the first decade of the new century. With the health care industry's heightened emphasis on quality, physicians have received increased pressure and scrutiny in the care they deliver, as exemplified in physician performance measurement and pay-for-performance programs. In an era of “accountable care,” physicians have been observed to increasingly engage in strategic relationships with hospital-based health care organizations, forming integrated delivery systems (Cuellar and Gertler, 2006). Hospitalists—full-time salaried physicians working exclusively in acute care settings—have flourished as hospitals have realized improved efficiency and reduced costs by their employment (White and Glazier, 2011). Hospitals have recently found value in employing groups of hospital-focused specialists as well (Nelson, Wellikson, and Wachter, 2012). At the same time, Casalino, November, Berenson, and Pham (2008) noted that even as physicians were increasingly employed by hospitals during the past decade, a divergent trend simultaneously emerged as nonsalaried physicians increasingly separated themselves from hospitals by declining medical staff committee service, refusing to provide on-call support, or even developing their own specialized facilities such as ambulatory surgery centers in direct competition with hospitals.

The past decade has brought considerable uncertainty for primary care physicians in particular. Increased demand for these physicians has been accompanied by the promotion of models such as patient-centered medical homes that emphasize the role of the primary care physician, yet primary care physicians continue to see a significant gap between their wages and the higher compensation averaged among specialty physicians (Leigh et al., 2010). With heavy workloads and relatively low wages, US medical students have increasingly elected to enter specialty care fields rather than pursue primary care medicine (Palmeri et al., 2010). Meanwhile, midlevel practitioners and nonphysician providers, such as nurse practitioners and physician assistants, have continued to see their role as primary care providers increase. These “physician extenders” are often appreciated for their ability to provide cost-effective and quality care, though some primary care physicians see them as a threat to their role and profession. Accounting for these issues collectively, some predict that primary care doctors will be a rare breed by 2025 (McKinlay and Marceau, 2008).

In the midst of a turbulent environment, physicians' view of their roles and work has changed as well. Many physicians today experience burnout as a result of heavy workloads and reduced autonomy, thereby threatening the quality of care they provide as well as the successful implementation of health care reform (Dyrbye and Shanafelt, 2011). While more physicians question their satisfaction with work and evaluate the balance between their personal and professional lives, the recent influx of women and a younger generation of physicians in the medical profession has led to a shift in work attitudes, desires, expectations, values, and even skills among today's physicians (Vanderveen and Bold, 2008; Sanfey et al., 2006).

Academic medical centers, the sites at which health care professionals are trained and developed, have also realized increased uncertainty over the course of the past decade. These facilities, a crucial component of the US health care system, commonly struggle to compete and are challenged in their commitment to simultaneously meet missions of education, community service, innovation, and quality of care while wrestling with financial problems, teacher shortages, and threats to funding (Griner, 2010; Albanese, Mejicano, and Gruppen, 2008). At the same time, some experts suggest that academic health centers, because of their integration, may be well positioned to succeed in an era emphasizing accountable and coordinated care (Griner, 2010; Shoemaker, 2010).

Changes in Patients and Patient Needs

Health care organizations' efforts to transform the ways they provide care over the past decade have been largely influenced by changes in the makeup of patients and the types of conditions they commonly treat. The US population is aging, becoming more diverse, becoming increasingly overweight and obese, and increasingly battling multiple chronic diseases and conditions such as arthritis, cancer, chronic obstructive pulmonary disease, diabetes, heart disease, and kidney disease. These conditions are linked to a substantial portion of health care spending and are primarily treated in outpatient settings or through patient self-management at home (Thorpe, Ogden, and Galactionova, 2010). Obesity is now regarded as an epidemic in the United States, contributing to significant growth in medical expenses and the prevalence of chronic disease (Finkelstein et al., 2009), and alarming rates of childhood obesity have raised concerns that drastic action must be taken now to reverse trends pointing to a devastating future for the health of America's children (Frieden, Dietz, and Collins, 2010). As a result of these factors, the health needs of patients are changing, with a dire need for a growing primary care workforce incorporating preventive care, disease management, and multidisciplinary teams (Dexter et al., 2010; Bodenheimer, Chen, and Bennett, 2009).

Shift to Ambulatory and Outpatient Care

The past decade also witnessed the continuation of a shift from inpatient care to ambulatory and outpatient care. During this time, a gradual decline in inpatient use was paired with a dramatic rise in the use of outpatient care, with Medicare spending on outpatient services roughly doubling between 1999 and 2010 (Medicare Payment Advisory Commission, 2012). Today outpatient care is one of the fastest-growing segments of the US health care system and is projected to continue its growth trend (Medicare Payment Advisory Commission, 2012). Such growth is the result of numerous factors, including improved technology to deliver complex services in outpatient settings, insurers' heightened efforts to limit health care costs, and patients' attraction to outpatient services due to their convenience and accessibility. As the use of outpatient services continues to grow, hospitals have come to rely on outpatient business as a key source of revenue and have been confronted with heightened competition from non-hospital-based providers (Shi and Singh, 2013). Increasingly common examples of alternative outpatient sites include ambulatory surgery centers, diagnostic imaging centers, freestanding emergency departments, urgent care clinics, and retail clinics, where care is provided outside hospital walls.

Retail clinics in particular experienced tremendous growth toward the end of the decade, described by some as a “disruptive innovation” for their impact on the provision of primary care (McKinlay and Marceau, 2012; Hwang and Christensen, 2008; Lin, 2008; Malvey and Fottler, 2006). Originally operated by retailers (e.g., Walmart, Target, CVS, Walgreens) rather than traditional health care organizations, numerous hospital-based systems have expanded their operations into retail clinics (Robeznieks, 2007). For these systems, the reasons to operate such clinics are many: they address the growing demand for and shortage of primary care, alleviate pressure from overcrowded emergency departments while costing considerably less, introduce referral opportunities to additional system services, and are attractive to both new and existing patients for their accessibility, affordability, and convenience (Kaissi, 2010; Laws and Scott, 2008; Lin, 2008). However, industry observers offer mixed predictions as to the future of retail clinics, including who will ultimately benefit and who will be severely challenged from their rise (McKinlay and Marceau, 2012; Kaissi, 2010; Laws and Scott, 2008; Malvey and Fottler, 2006).

Economic Crisis and Recession of 2008

The worst economic crisis in the history of the United States since the Great Depression of the early 1930s that arose late in the first decade of the new century led to the reorganization and downsizing of numerous companies, layoffs, unemployment, and a reluctance to hire. All of this added to the population without health insurance, thus increasing the pressure on delivery organizations to find ways to offset the uncompensated care burden. Companies everywhere experienced increased uncertainty and a reluctance to commit to large expenditures and capital expansion. In health care, as in other sectors of the economy, there was a reduction, or “skinnying,” of middle management through the elimination of positions to reduce expenses and increase efficiency. The toll this has taken on this stratum of administrative personnel as well as frontline clinical staff is yet to be determined. The nation also observed a growing void between the haves and the have-nots, sparking considerable public unrest and discontentment that was vividly illustrated through the Occupy Movement in 2011. The health care industry is not immune to the frequent cries against the social and economic inequality apparent between those in the top 1 percent and the remaining 99 percent, and as these sentiments pertain to inequality in access and quality of care, growing attention in the health care industry has been directed to improving equity of care (May, 2011).

Additional Trends

Another relevant trend that has emerged is medical tourism, an outcome of the general process of economic globalization. Whether it be American citizens who go abroad for treatments unavailable or too costly in the United States or foreign citizens who come to the United States for treatment, the prevalence of cross-national boundary hopping for medical care has increased materially (Understanding Medical Tourism, 2012). The implications of this phenomenon are hard to predict, but to the extent that companies and insurers are willing to offer lower fees abroad for high-cost procedures like joint replacements, American hospitals and specialists may find lucrative revenue streams diminished. Contrariwise, as some foreign health systems use waiting times as a form of rationing, demand by foreign nationals for faster service for some procedures in the United States may counterbalance the loss of American patients. The underlying issue is that medical tourism adds to turbulence and uncertainty in the US health care sector.

Development of niche providers such as specialty hospitals and concierge medicine is another phenomenon that has not existed to the existing degree until recently. Specialty hospitals, which some call “focused factories,” provide services in specific and narrow domains: orthopedic procedures, cancer clinics, cardiovascular hospitals, and the like. General full-service hospitals have fought this movement because they argue that lucrative service lines are being pulled from their facilities that also must provide unprofitable services such as emergency departments (Devers, Brewster, and Ginsburg, 2003). The American Hospital Association, taking the position of full-service hospitals, was able to consolidate enough support in the US Congress that a moratorium on physician-investor referrals to new physician-owned specialty hospitals was in effect from 2003 to 2007 as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

So-called concierge medicine, also known as direct care, boutique medicine, or retainer-based medicine, is yet another recent approach to deliver health care privileges to the patient relationship with clinicians through an annual fee. This gives patients a higher level of access to health services, more time spent with their physician, and additional services that ordinary care might not provide. Often concierge services do not accept traditional insurance payment, but recommend it for services needed outside the concierge practice. The implications of this movement are also hard to discern: this form of care may contribute to a two-tiered level of service, with more exclusive and higher quality of care provided to those who are economically well off. Or it may allow a simpler, more straightforward, and more thorough doctor-patient relationship that new forms of performance payment systems from insurers are making harder to provide. In any event, this movement is probably symptomatic of both consumer discontent with restrictive elements of organizationally based medical care such as PPOs, HMOs, integrated delivery systems, and the like and provider disillusionment with performance-based delivery systems and pay-for-performance reimbursement formulae.

In addition, palliative care and hospice services have increased in popularity as attention to rising medical spending has been paired with increased value placed in patient-centered care. Patients with serious or terminal illnesses represent a small but most costly group of patients within the US health care system, and palliative care and hospice services have been found to reduce medical costs significantly while improving patients' quality of life and satisfaction with care (Meier, 2011; Morrison et al., 2011). As these services continue to grow in popularity, more information is needed to better understand the benefits of palliative care, identify the most effective palliative care practices, and promote the growth of the palliative care workforce and the availability of such services throughout the US health care system (Meier, 2011; Zimmermann et al., 2008).