Engage in scenario planning to prepare for the changes ahead, Frank Lexa, MD, MBA, says. Lexa identifies six incontrovertible challenges that drove the adoption of health-care reform (and another six issues that will bedevil radiologists, moving forward) in “Healthcare Reform and the Future of Radiology: Navigating the Change,” which he presented at the inaugural ACR® Radiology Leadership Institute™ in Evanston, Illinois, on July 14, 2012.
Lexa, vice chair and professor of radiology at the Drexel University College of Medicine, names half a dozen issues that he knows cause concern among radiologists: reimbursement; the stability of the Medicare system; accountable-care organizations (ACOs) and other new forms of care delivery; tort reform; power, relative to hospitals and primary-care physicians; and autonomy and professionalism. He recommends, however, that they focus on things to which there are no alternatives, including the issues that drove reform. “Focus on the things that are really going to rock your world in the next few years,” he says.
Readers are well aware of the first challenge, health-care inflation; costs soared from 5.2% of the GDP in 1960 (five years before Medicare was established) to 18.2% in 2012. If costs continue to rise in historical patterns, Social Security and Medicare will consume 89% of income-tax revenues in 2080. “Somewhere around 2080 or so, we will have to turn the lights off in the Smithsonian in order to pay for the next MRI that comes through,” Lexa quips.
The second challenge also is well understood: demographics and the aging of the baby boomers, the generation now transitioning from being net payors into the US Treasury to net recipients. “Very quickly, it is going to go down to two workers for every one person on the system, and that is going to create problems,” he says. “If it is any consolation, the United States is not the only country in the world with this problem.” The country with the population that is aging most rapidly, in fact, is China.
Challenge number three is fiscal pressure coming from multiple directions. Differing from the US debt, the deficit, Lexa explains, is the annual accounting of income in versus payments out, projected at $1.3 trillion for 2012. At more than 10% of the GDP, the deficit is at a level reached just twice in the past 110 years: during World Wars I and II.
The US debt is considerably larger than the deficit; it represents US borrowing to cover deficits, and it now stands at almost $16 trillion. As a percentage of the GDP, it is equivalent to the annual budget of the United States, prompting the need to raise the debt ceiling.
The bigger problem, from Lexa’s perspective—and from that of others facing retirement age—consists of unfunded obligations for entitlement programs, estimated to be between $50 trillion and $100 trillion. “Is $100 trillion more than the value of the United States?” he asks. “The answer is not quite.”
Value is the fourth concern. Lexa shares OECD data that illustrate another well-known fact: Although the United States spends more than any other country on health care, it ranks 28th in life expectancy—just above Chile and below Slovenia (see figure).
Map of Greed
Lexa benchmarks the United States against itself using relative Medicare spending levels in different zip codes, which he refers to as a map of greed, as well as a map of need. Variability is a red flag, Lexa notes, and is something to which CEOs pay a lot of attention. When the ACR reviewed variability in imaging utilization among Medicare enrollees, it found that the US city with the highest utilization rate used 3.5 times as much imaging as the and the city with the lowest rate. Lexa asks, “Would that get your attention, if you were a policy wonk?”
Figure. Life expectancy (in years) of individuals born in 2006 (red) and 2008; adapted from the OECD.¹
The fifth challenge, he says, is social justice, including the need to extend coverage to 30 million uninsured patients. He suggests that the fact that the United States is the only nation (among those even remotely similar to it) that does not offer some form of health insurance for its citizens qualifies this issue as a serious one. The sixth challenge (and final driver of health-care reform) is the need to shift power from specialty care to primary care.
No matter who ends up in the White House in 2013, Lexa says, the passage of a bill that initially did not have a lot of popular support