Healthcare Delivery as a Service System: Barriers to Co-Production and Implications of Healthcare Reform

Healthcare Delivery as a Service System: Barriers to Co-Production and Implications of Healthcare Reform

Arjun Parasher (Leonard M. Miller School of Medicine, USA), Pascal J. Goldschmidt-Clermont (Leonard M. Miller School of Medicine, USA) and James M. Tien (University of Miami, USA)
DOI: 10.4018/978-1-60960-872-9.ch009
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Abstract

Both during and after the recent reform efforts, healthcare delivery has been identified as the key to transforming the U.S. healthcare system. In light of this background, we borrow from systems engineering and business management to present the concept of service co-production as a new paradigm for healthcare delivery and, using the foresight afforded by this model, to systematically identify the barriers to healthcare delivery functioning as a service system. The service co-production model requires for patient, provider, insurer, administrator, and all the related healthcare individuals to collaborate at all stages – prevention, triage, diagnosis, treatment, and follow-up – of the healthcare delivery system in order to produce optimal health outcomes. Our analysis reveals that the barriers to co-production – the misalignment of financial and legal incentives, limited incorporation of collaborative point of care systems, and poor access to care – also serve as the source of many of the systemic failings of the U.S. healthcare system. The Patient Protection and Affordable Care Act takes steps to reduce these barriers, but leaves work to be done. Future research and policy reform is needed to enable effective and efficient co-production in the twenty-first century. With this review, we assess the state of service co-production in the U.S. healthcare system, and propose solutions for improvement.
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Introduction

Even with the passage of the Patient Protection and Affordable Care Act (hereafter referred to as PPACA), the U.S. healthcare system faces the enduring challenges of increasing access, improving quality, and lowering cost. By 2020, 23 million Americans are estimated to still lack health insurance coverage (Congressional Budget Office [CBO], 2010) and healthcare costs are expected to rise to 21.1 percent of gross domestic product (Center for Medicare and Medicaid Services [CMS], 2010). From 2000 to 2008, U.S. per capita healthcare expenditures grew annually by 3.5 percent, somewhat less than a 4.2 percent average annual growth rate for the 30 industrialized nations included in the Organization for Economic Cooperation and Development (OECD) database (OECD, 2010). These rising healthcare costs, while part of a larger global trend (see Table 1), hold significant consequences for employees, business, and government alike.

Table 1.
Growth in healthcare expenditure for OECD nations (2000-2008)
2000-20012001-20022002-20032003-20042004-20052005-20062006-20072007-20082000-2008 Avg.
OECD countries
Australia3.54.92.04.80.42.62.53.0
Austria1.61.42.13.01.71.83.33.52.3
Belgium1.93.03.87.0-0.8-1.07.04.93.2
Canada6.15.12.92.02.73.41.93.33.4
Chile4.20.7-0.41.11.80.38.613.03.7
Czech Republic5.18.28.80.96.92.42.48.55.4
Denmark4.02.46.33.72.64.32.73.7
Finland4.76.76.64.75.13.32.33.14.6
France2.43.53.92.82.01.31.20.82.2
Germany2.32.01.2-0.81.91.91.52.51.6
Greece16.16.53.71.012.35.44.17.0
Hungary6.110.515.41.07.91.2-7.1-1.34.2
Iceland0.87.94.11.51.3-1.63.1-1.71.9
Ireland14.99.67.25.82.92.04.414.87.7
Italy3.61.7-0.74.23.22.3-2.73.51.9
Japan3.30.42.82.13.41.02.82.3
Korea14.43.46.94.410.311.49.14.78.1
Luxembourg7.98.710.49.6-2.6-3.75.1
Mexico6.12.73.16.50.50.65.31.43.3
Netherlands5.56.310.03.90.42.13.33.54.4
New Zealand4.47.40.08.16.95.4-0.36.34.8
Norway6.112.32.7-0.5-3.9-3.55.0-3.91.8
Poland7.49.82.44.73.86.110.814.57.4
Portugal1.02.06.33.82.4-1.32.4
Slovak Republic4.07.08.330.14.112.916.57.411.3
Spain2.91.414.02.13.13.32.88.44.8
Sweden9.75.92.71.42.52.62.22.23.7
Switzerland4.92.72.22.21.3-1.31.11.71.9
Turkey-3.18.73.58.68.612.67.46.6
United Kingdom5.36.25.15.54.54.83.02.64.6
United States5.06.25.13.02.52.32.21.33.5
Average: 4.2

Source: OECD Health Data, 2010

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