The Covid-19 outbreak shook financial markets for two years, dominated news coverage, and impacted daily life in ways that most Americans never would have imagined.
The coronavirus, however, has now been lowered to a chronic but controllable hazard, on par with the flu, in year three. Three-quarters of Americans believe the worst of the Covid-19 is behind us thanks to some well-known medical treatments (vaccines, antiviral medications, and public safety measures).
A new calamity is now imminent. The perfect storm is directly heading toward American healthcare.
Forecasting disaster
Predictions of doomsday are frequently incorrect or exaggerated. However, a group of Louisiana State University storm scientists stated in 2004 that “a disaster [is] right on the horizon.” They were accurate. New Orleans was eleven feet under water less than a year later. 1,833 individuals were killed by Hurricane Katrina, and many more were left homeless.
How did the scientists learn that Katrina was on the way? They saw a convergence of potentially lethal forces—rising heat, weak levies, high wind speeds, transportation challenges, and more—that, when combined, would ensure disaster using data-based computer simulations.
The American healthcare system is experiencing a similar issue.
The “most expensive and least effective” healthcare system in the industrialised world is the one in the United States as a result of years of price increases, declining quality, and improper use of technology. These protracted healthcare conditions can be dealt with on their own and may have been handled over time utilising tried-and-true solutions.
But that was before a trifecta of “mega forces” descended, which now pose a threat to produce the equivalent of the perfect storm in healthcare. These factors will coalesce into a major medical catastrophe that will be far more devastating and expensive than Covid-19 if dramatic and fast answers are not found.
1. Untamed Inflation
In my 2021 book Uncaring, I made the prediction that the trillion-dollar federal Covid-19 relief efforts will result in a sharp increase in inflation. I could not foresee, however, that a string of international occurrences—the conflict in the Ukraine, a worldwide oil shortfall, and a protracted supply-chain squeeze—would enter the picture and, collectively, push U.S. inflation to a 40-year high.
Without these additional strains, our nation could have had five to ten years to address the most challenging issues in healthcare. Instead, the US no longer has the luxury of toying with payment structures or long-term medical practise reform.
The majority of patients and public health professionals are unaware that healthcare costs are set to soar. They make the error of contrasting the current, skyrocketing consumer costs with the comparatively low rate of healthcare inflation.
Healthcare costs do not, however, vary in real time like the prices of petrol, groceries, and homes do. Instead, prices are determined one to two years in advance and are fixed for 12 to 24 months for everything from nursing salary to bandages and Rx drugs.
The piper must be paid when these contracts are up for renewal this fall.
The cost of labour in the healthcare industry is rising. Raw materials and supply-chain costs are also included. Healthcare costs are anticipated to continue to rise to unaffordable levels for decades to come due to the same forces that have caused consumer prices to increase by 8% to 9%.
Most U.S. health insurers intend to raise employer premiums by 10 to 15% starting in 2019, and it’s likely that American households will pay an even higher percentage as their share of the cost of healthcare.
2. The Nursing Shortage
My acquaintance, a surgeon, cancelled arrangements for supper last Friday at 4 p.m. He informed me that one of his patients who had surgery scheduled for that morning was still awaiting it. The doctor didn’t want to postpone the treatment because the patient had been prohibited from eating or drinking since the previous evening.
Surgery cancellations and delays are becoming more frequent. The growing lack of nurses is one of the main forces.
Many RNs aspire to leave the workforce entirely, and one-third of them plan to leave their current positions, according to numerous surveys. More than one in four baby boomer registered nurses plan to retire this year.
It is quite problematic for patients that there are fewer employees. Without enough nurses, hospitals can’t even function. Minimum standards for RN staffing on medical floors and in critical care units are imposed by state authorities. In operating rooms, where skilled nursing is crucial for providing the best patient care, the nursing shortage is particularly severe. When hospitals are unable to handle these demands, patients must be turned away and care is delayed.
You might think that adding more students to nursing programmes and raising class sizes would be an easy answer. It takes at least five years to prepare nursing students to provide bedside care, and even longer to prepare them for operating rooms. However, training nurses is expensive and time-consuming. The fact that an experienced RN is required to teach nursing students the practical skills of bedside patient care further complicates the situation.
Additionally, despite the fact that assigning experienced RNs to instructional positions rather than care delivery roles is the best long-term option, hospital administrations are reluctant to do so due to a nursing shortage.
Hospital administrators feel entrapped in lose-lose situations due to the simultaneous risks of inflation and nursing shortages. They are aware that aggressive compensation increases to attract and keep nurses will result in skyrocketing costs, while salary freezes to deal with continuously rising costs will result in an increase in nurse attrition.
Without prompt action, surgical backlogs will increase, delaying or cancelling surgeries for even patients with full insurance coverage. Progressively worse outcomes, preventable complications, and perhaps death, will be the outcome.
My acquaintance told me his patient ultimately underwent surgery at 2 a.m. when he called the next day. The lawsuit, fortunately, proceeded smoothly. He responded, “They’re still angry,” when I inquired about the family’s reaction.
3. The Burnout Crisis
Doctors were reporting burnout rates of up to 44% even before the outbreak. The emotional toll on healthcare professionals has now reached a breaking point following two years of increasing job demands and an unending stream of patient deaths.
The lack of nurses and support workers, together with efforts by insurers and hospital executives to save costs, have only served to increase the unhappiness.
The problem is known as “moral injury,” a pain that results from being unable to deliver outstanding medical care, according to doctors who are increasingly rejecting the term “burnout.” Physicians claim that insurance company executives and hospital managers are more focused on money than patients. In addition, doctors believe they don’t receive the respect and gratitude due them for all their hard work.
In order to get better pay and more control over their daily lives, disgruntled doctors are turning to private equity firms. Leaders in private equity see this as a fantastic business opportunity.
The PE strategy is to first enlist as many local experts as you can (with a particular eye on the kinds of doctors that hospitals need to stay in business: anesthesiologists, ER physicians, orthopedists, urologists and cardiologists). The PE firms expect much higher physician reimbursements from insurers and hospitals (of at least 25 percent) after gaining market power through consolidation.
Private equity investments in healthcare increased dramatically from $42 billion in 2010 to $120 billion in 2019. The last thing these businesses want is to decrease reimbursement, of course. And if burnout worsens, more and more doctors will choose this path, exacerbating the expense crisis in healthcare.
This terrible concoction of forces, which strikes the medical industry all at once, will do enormous harm, just as it did with Hurricane Katrina. In addition to the ongoing healthcare issues that predate Covid-19, double-digit inflation, a critical nursing shortage, and monopolistic control of physician specialists through private equity will result in a massive tragedy unless we act quickly and bravely.
The previous approaches, such as financial rewards and giving doctors and nurses ever-increasing patient loads, are ineffective. Try increasing nursing pay or giving in to demands from private equity, and we’ll just make healthcare inflation worse. The unhappiness of nurses and doctors will intensify if compensation is cut, and access will be compromised.
