Seeping through the seams – Improving quality and collaboration in the U.S. healthcare system
Sam Miles 
Date published: Nov 15, 23
Where does the U.S. rank in healthcare?
Despite spending $2.6 trillion in health research, care, and services every year – the highest per capita figure in the developed world – the United States lags behind other industrialized nations in a string of key healthcare indicators, receiving a modest Healthcare Quality & Access (HAQ) Index Rating of 88.7 in 2018 – placing the U.S. in 29th spot, behind Malta, Cyprus, and Slovenia to name a few [1].
The shortcomings of American healthcare, and the challenges impeding the delivery of consistent healthcare quality to 330 million citizens, stand out as a major target for the U.S. government in a decade kick-started by a major global pandemic.
So, what problems does American healthcare face? And what part can consistent quality management and effective collaboration play in resolving these issues?
Problem #1: The leaky bucket
Quality professionals in healthcare, as in any industry, understand the value of optimized efficiency. Minimizing expenditure, defects and wastage, maximizing the value and impact of corporate spend and embedding continuous improvement are at the forefront of modern quality management.
However, it’s difficult to see the U.S. healthcare system as a paragon of efficiency or continuous quality improvement. The position of the U.S. in the global healthcare rankings, despite spending 50% more than its closest rival (Norway) in per capita healthcare investment, clearly demonstrate a leaking bucket. In other words, the U.S. is throwing vast amounts of money at its healthcare system – which is fantastic - but money, in huge sums, is being thrown away through a myriad of inefficiencies.
3 key sources of this general inefficiency stand out:
- The decentralized, direct-fee private insurance system underpinning American healthcare makes a vast quantity of accountants and clerks necessary to perform the record-keeping, billing, and administrative tasks required by hundreds of insurance organisations. Account vary as to what percentage of healthcare expenditure administration takes up in the U.S., but even the most modest estimates put this at 8.3%, compared to 0.6% for Norway and 5.7% for France. Estimates on the other end of the scale can reach as high as 31%! [2]
- In spite of this administrative bloat, investment in electronic systems remains limited, perpetuating inefficient, costly, and time-intensive paper-based systems. Digitalization, integrated collaboration systems and even email communication with patients remain low.
- A largely unregulated ‘fee for service’ model allows hospitals and professionals to charge more for their services than in any other country – in turn incentivising superfluous or unnecessary services to maximise income, such as extra diagnostic tests and add-on procedures. Conversely, and closely linked with the point above, healthcare providers face little incentive to modernize and digitize how they operate, with chargeable face-to-face correspondence preferred over more efficient electronic communication.
What does all this mean? The astronomical costs of U.S. healthcare simply don’t translate into comparable levels of quality for patients. The bucket is being filled to the brim, but nothing is being done about the leaks.
Problem #2: Decentralization
While the American federal system has many benefits, decentralisation has opened the U.S. healthcare system up to several deficiencies and weaknesses.
The absence of central oversight makes negligence, and even deliberate criminal activity, less likely to be rooted and stamped out – bringing serious wellbeing and safety issues for U.S. patients.
There are many highly-publicized cases of failures to stop repeated acts of malpractice and in some cases deliberate harm. Offenders like Dr Christopher Duntsch (covered in Wondery’s popular Dr Death podcast) and Charles Cullen (covered in the Netflix film The Good Nurse) moved from hospital to hospital, continuing to harm patients, after being dismissed multiple times.
Carlos Bagley, UT Southwestern’s director of neurosurgery, commented in the Christopher Duntsch case that “the only way this happens is that the entire system fails the patients”.
A study by Johns Hopkins put medical errors as the third highest cause of death in the U.S., after heart disease and cancer [3]. And a lack of all-encompassing oversight might explain why major diagnostic errors are found in 10% to 20% of autopsies, suggesting that 40,000 to 80,000 patients die annually in the U.S. from diagnostic errors, despite widespread underreporting. [4]
We can also see widespread deliberate exploitation of the fragmented U.S. healthcare system. On June 28th 2023, The U.S. Justice Department charged 78 people with $2.5 billion in healthcare fraud. These healthcare, telemedicine, and illegal prescription schemes exploited particularly vulnerable people, including the elderly, and those with addiction issues. [5]
The National Health Care Anti-Fraud Association (NHCAA) estimates that the financial losses due to health care fraud are in the tens of billions of dollars each year [6]. Some of the more common frauds committed include:
- Billing for services that are never delivered – including through fabricating claims entirely, or padding other legitimate claims with charges for procedures that didn’t take place.
- Falsely billing for a higher-priced treatment than what actually took place.
- Performing unnecessary services for the purpose of generating insurance payments
- Accepting bribes for patient referrals.
- Billing for each step of a procedure as if they are separate services entirely.
Discrete, unintegrated systems of hospitals, private insurers, nursing facilities and home care allow fraud and exploitation to flourish while minimizing quality assessment and assurance as patients are handed off to move between different layers of the healthcare system.
As Ken Shine, former President of the Institute of Medicine puts it:
“We operate our healthcare system like a cottage industry, big, big cottages with state-of-the-art technologies to care for patients, but infrastructure which is totally inadequate, systems which don’t talk to each other.”
This decentralization ultimately weakens the delivery of consistent healthcare quality, with multiple studies and surveys highlighting:
- Limited collaboration and continuity of care
- Miscommunication
- Wasteful, redundant processes and systems
These coordinative shortcomings were thrown into the limelight by the impact of the COVID-19 pandemic, with the U.S. being the only country to reach over 1 million deaths, as of June 30th 2023. [7]
Problem #3: Limited patient centricity
The core objective of quality management? To satisfy the recipients of your services with targeted, fit-for-purpose processes. Yet we can see numerous areas where the U.S. healthcare system fails to take into account the needs and wants of patients.
Along with the wasteful, expensive, and often unnecessary treatments we’ve already seen, the U.S. lags behind other developed countries in its ability to treat avoidable mortality: Compared to peer nations, the U.S. has among the highest number of hospitalizations from preventable causes and the highest rate of avoidable deaths. Additionally, Americans had fewer physician visits than peers in most countries. [8]
In 2021 8.3 percent of people, or 27.2 million, did not have health insurance at any point during the year [9], opening them up to financially crippling medical bills in the event of an emergency.
Research by the American Public Journal of Health has shown that 58.5% of bankruptcies were caused specifically by medical bills [10] – with prices set not by patients’ service satisfaction or ability to pay, but by a complex interplay of profit-sharing, contractual agreements and negotiations between a string of third parties.
Compared to similar countries, the U.S. remains marked by
- Low life expectancy
- High suicide rates
- High obesity
- High chronic disease burden
Yet the healthcare system remains largely geared toward acute short-term care, rather than treating the chronically and long-term ill.
Take into account other factors like the prescribed opioid epidemic unfolding since the 1990s, and it’s clear why around 7 in 10 Americans hold a negative view of healthcare in their country.
In short, many Americans do not feel their healthcare system accurately reflects their expectations or provides the targeted, appropriate treatment they need. Scaling these quality challenges will be an unavoidable hurdle if trust and satisfaction are to be increased.
The role of quality & collaboration
In many ways, the quality and collaboration challenges in the U.S. healthcare system are similar to those affecting many modern businesses. Disconnected siloes, leaky processes, and limited use of digital systems is hampering the delivery of effective healthcare in the U.S. In order to improve the value provided in the U.S. healthcare system there should be a focus for healthcare providers on quality, collaboration and establishing a culture of compliance and continuous improvement.
One element of continuous improvement is internal and clinical audits and finding opportunities for improving patient outcomes.
Find out how you can simplify your audit processes in our latest eBook – U.S. Healthcare: Simple solutions for high quality audit and collaboration processes.
Download now[2] How Administrative Spending Contributes To Excess US Health Spending | Health Affairs
[4] What is Diagnostic Error? - Society to Improve Diagnosis in Medicine
[5] DOJ targets nationwide health care fraud scheme involving over $2.5 billion | CNN Politics
[6] The Challenge of Health Care Fraud – NHCAA
[7] COVID-19 pandemic death rates by country - Wikipedia
[8] U.S. Health Care from a Global Perspective, 2019 | Commonwealth Fund
[9] Health Insurance Coverage in the United States: 2021 (census.gov)
[10] Medical Bankruptcy Is Killing The American Middle Class | Nasdaq