Public perception of U.S. healthcare has mostly stayed the same since the 1990s. For 30 years, most Americans have described the system as in a “state of crisis” or facing “major problems.” That sentiment remains the same today. Recent surveys find 80% of Americans are concerned about access to quality care, and nearly half give the healthcare system a failing grade.
While surveys provide a qualitative snapshot of public opinion, they don’t identify specific challenges hidden in the industry’s labyrinthine structure. Providers, payors, patients, pharmaceuticals, medical device manufacturers and digital health companies face unique challenges within disparate, often competing, silos.
The COVID-19 pandemic may have laid bare the need for systemic change, but the problems are not new. Industry leaders, providers, policymakers and healthcare consumers have long been aware of the need to improve access and ensure quality while controlling costs.
Indeed, the nation and the healthcare system are at a crossroads, and nowhere is this more obvious than Nashville. The location of more than 500 healthcare companies’ headquarters, Nashville is the nation’s healthcare capital, generating more than $97 billion in revenue and 500,000 jobs across the world.
Founded in 1995, the Nashville Health Care Council serves as common ground for the Council serves as the common ground for the city’s vibrant healthcare cluster. The Council spurs dialogue grows leaders and advances innovation through engagement opportunities such as Leadership Health Care and the Nashville Health Care Council Fellows program.
As a community where competitors are free to collaborate and exchange ideas, the Council encourages healthcare industry leaders to shape a smarter, more efficient system by focusing on four broad areas: costs, access, equity and policy.
Healthcare costs
Healthcare costs are increasing at a frenetic rate. In June 2023, the Centers for Medicare and Medicaid Services (CMS) released projections for overall U.S. national healthcare spending for the next decade. The average annual growth in National Healthcare Expenditure (NHE) is 5.4%, a percentage that will quickly outpace the expected 4.6% growth in the gross domestic product. If the trend continues, CMS says health spending’s share of GDP will reach 19.6% in 2031, up from 18.3% in 2021.
Those increases have real impacts on both consumers and providers. According to the Kaiser Family Foundation, half of U.S. adults say they have difficulty affording healthcare, with 40% saying they have delayed or gone without medical care due to cost.
Hospitals, physician practices, clinics and other healthcare entities are also seeing costs increase, primarily brought about by:
Specifically, 67% of healthcare leaders say payors are denying claims more often, and 11% of all claims were denied in 2022, an increase of 10.1% from 2021. Modern Healthcare says these denials cause “more administrative work for providers, less cash flow for hospitals and postponed patient care.” Shon Dwyer, president of Vanderbilt Adult Hospital at Vanderbilt University Medical Center in Nashville and a 2023 Council Fellow, said the facility’s expenses increased 19% in 2022.
Staffing remains an expensive challenge for healthcare entities. An estimated 100,000 nurses left the profession during or immediately after the pandemic. Unfortunately, the trend continues. A pulse survey conducted in March 2023 by McKinsey & Company found 40% of inpatient R.N.s intend to leave their jobs within a year. Physician shortages are a lingering issue, especially in rural areas. According to the Association of American Medical Colleges, the U.S. will be short 124,000 physicians by 2034.
Many providers use healthcare staffing agencies to fill positions, but it comes with a cost. The American Hospital Association says the hourly rates staffing agencies charged to hospitals increased by 213% between January 2019 and January 2022. While the demand for contract labor has decreased since the pandemic's peak, healthcare entities struggle to fill physician, nursing, allied health professionals and behavioral health positions. Many providers say staffing is far from optimal, creating widespread access problems throughout the healthcare ecosystem.
Healthcare access
Access to care is driven in large part by provider shortages, especially in rural areas. For example, Leslie Meehan, deputy commissioner for the Tennessee Department of Health and a 2023 Nashville Health Care Council Fellow, said 55 of the 90 counties in Tennessee have no obstetrician.
Consumers often wait weeks or months for an appointment in areas with providers, with wait times nearly as long as those in the United Kingdom. Provider shortages, a backlog of credentialing and regulations that prevent providers from practicing across state lines limit the number of providers available.
Insurance coverage is another barrier to access. CMS says the number of Americans with health insurance has probably peaked, with a historic high of 92.3% in 2022. The Kaiser Family Foundation estimates between 8 and 24 million people who remained on Medicaid rolls during the pandemic will lose benefits following the expiration of the continuous enrollment provisions in March 2023.
The situation is worse in the 10 states that have not expanded Medicaid. With fewer people eligible for Medicaid, hospitals treat more uninsured patients. Nearly 3.5 million more people would qualify for Medicaid if these states expanded to include those living within 138% of poverty. States like Tennessee have not broadened Medicaid eligibility, instead taking a different approach to expanded coverage. According to TennCare Director Deputy Commissioner Stephen Smith, the state is opting to use $300 million in programmatic savings to develop programs, increase provider reimbursement and broaden eligibility.
Compounding the lack of access are health plans that won’t authorize care. Medicare Advantage (MA) plans cover about half of Medicare-eligible beneficiaries in the U.S. In 2021, MA plans denied about 6% of 35 million prior use authorizations in 2021. Congressional leadership has taken note of the issue, telling the nation’s largest insurers they cannot rely on algorithms to grant or deny access to care.
Healthcare equity
Along with access to care, systemic inequities create living situations that negatively impact social determinants of health. For example, people living in urban areas have limited access to grocery stores, green spaces, sidewalks, childcare or public transportation. These factors combine to create adverse health outcomes such as increased rates of high blood pressure, diabetes, obesity, cancer and cardiovascular disease.
For example, the highest rate of high blood pressure in Metro Nashville is the 37208 zip code, a traditionally underserved community. Structural inequities impact health outcomes in the North Nashville community. Lack of access to nutritious food, limited public transportation, few health resources and low walkability scores hinder healthy choices and preventive health care.
Dr. James E.K. Hildreth, president and CEO of Nashville’s Meharry Medical College, a historically Black institution, says racism is a common thread among six social determinants of health: access to health care, social construct, geography, educational attainment, economic stability and access to technology.
But Hildreth said racism pervades healthcare in different ways, too. Less than 10% of medical students come from historically Black colleges and universities compared to 26% a decade ago. Additionally, Hildreth said schools like Meharry are often left out of the running for government-backed research grants.
A study shows Black researchers make up 1.8% of all National Institutes of Health investigators while white men account for 64.7%, and the list of 20 academic medical centers with the most NIH funding includes no HBCUs.
The lack of representation extends through healthcare leadership as well, Hildreth said. In 2019, 89% of hospital CEOs were white (non-Hispanic or Latino), while 60% of the population was white (non-Hispanic or Latino). “Having so few African Americans and other minorities in the C-suite confirms an assumption that there are not many people qualified to sit in those seats,” he said.
Healthcare policy
Addressing these challenges has become more contentious in recent years due to the social and political climate. Dr. Alex Jahangir, who led Metropolitan Nashville Coronavirus Taskforce, said he faced "schoolyard bullies" who used social media to arm-twist and intimate without consequence.
“The virus wasn’t the only source of our problem. It simply laid bare our worst instincts and allowed the erosion of civility and loss of respectful discourse as we worked to solve really hard problems,” he said.
Former Tennessee Sen. Bill Frist said politicians today are less likely to seek common ground when tackling big problems, such as healthcare reform. “If you go head-to-head, you're not going to win in this partisan world,” he said.
However, finding ways to reach consensus is important since policy decisions affect healthcare consumers in tangible ways. For instance, long-standing regulations on virtual care were lifted during the pandemic to address provider shortages and to allow consumers to access care without an in-person visit. Many of those provisions will disappear at the end of 2024, which could further impact access to care.
“Is Congress going to be wise enough to say, ‘Well, in this day and time, both from a privacy standpoint, accountability standpoint and outcomes standpoint, that virtual health telehealth is really necessary and important?’ You've got 100 senators there who really make use of the lobbyists from the telemedicine, people, from the hospitals and from the doctors, but they need to hear from people on the line getting the data to make decisions that are going to influence the care of hundreds of millions of people in the future,” Frist said.
Building bridges
Challenges aren’t limited to any one sector of the healthcare industry. It will take all entities working together to improve access to care while containing costs across the healthcare ecosystem. The Nashville Health Care Council’s role is to facilitate global collaboration and serve as a catalyst for change. By building bridges among the varied healthcare interests, the Council serves to drive innovation in the industry, bring value to members and meet the needs of our healthcare community. Learn more at HealthCareCouncil.com.