Re-thinking U.S. Healthcare in a Post-Pandemic Future

As the COVID-19 outbreak widens, hospitals across the country are being stretched to their limits. They scramble to increase capacity to handle the surge of infections, while hunting for protective gear and medical equipment.

The novel coronavirus has laid bare some of the shortcomings of the U.S. healthcare system. The system is overtaxed now but, even before the pandemic, patients weren’t getting the best care. We have pockets with world-class hospitals, but the system as a whole fails to meet the needs of many patients.

During the height of the crisis, physicians, nurses and other healthcare workers are limited as to what they can do because, despite their best efforts, they are working within the confines of a fragmented system that is not designed to deliver the collective response that a pandemic requires.

As COVID-19 continues to put stress on the U.S. healthcare system, exposing its shortcomings, a multidisciplinary approach is needed to improve the performance of this complex fragmented system that wasn’t well designed from the start.

High costs and poor outcomes

The United States spends more on healthcare than any other country—close to 17 percent of GDP. Despite that, healthcare quality and outcomes are nothing but disappointing. According to the Organization for Economic Co-operation and Development (OECD), the U.S. has the lowest life expectancy and highest suicide rates among wealthy nations. It also has the highest chronic disease burden and an obesity rate that is twice as high as the OECD average.

Our healthcare system fails to translate rising costs into better health outcomes for patients. In most industries, this would be a perfect scenario for competition and innovation, but in the healthcare industry, that has just not been the case.

Efforts to make healthcare more efficient and cost-effective are decades’ long. However, it’s not easy to improve an extremely complex system that wasn’t well-designed in the first place. We have various autonomous healthcare systems and organizations that think of themselves as silos, and there’s no organizational or systems-level infrastructure in place in which there is a more fluid transfer of knowledge, patients and crucial supplies between hospitals. This fragmentation is what, among other things, exacerbates the current crisis.

A multidisciplinary approach to a complex problem

Solving a complex problem of a fragmented system calls for a multidisciplinary approach at the intersection of medicine and management. By using big data that captures millions of interactions among U.S. healthcare providers, we can examine efforts to reduce healthcare costs while improving patient outcomes.

Recently, I have been studying efforts by Medicare, the government health plan for the elderly and disabled, to increase integration and coordination among healthcare providers through the creation of accountable care organizations (ACOs). Medicare ACOs, which were launched in 2012, are formal associations of autonomous healthcare providers such as hospitals, physician groups, clinics and private practices, that establish a contract with the government to improve the value of healthcare for a specific population of patients.

In a sense, ACOs are a type of network intervention where different incentive structures, such as payment mechanisms and performance metrics, are used to promote better collaboration across organizational boundaries. We have found that policy-driven interventions, such as ACOs, are not enough to address the underlying issue of fragmentation. To improve the healthcare system, work must be done at a local level with healthcare organizations working together within their communities to put patients’ long-term outcomes ahead of the success of any individual hospital and clinic.

Lessons from the pandemic

Once the worst of the outbreak is behind us, will there be any changes in the U.S. healthcare system? There is one possibility.

During the current national health crisis, many front-line healthcare workers may be crossing organizational boundaries in unprecedented ways, helping where they are most needed in their communities. This is one of those shocks to the system that offers people and organizations opportunities to build stronger relationships with one another, in which case, after the crisis subsides, we may have something to build upon.

The more likely scenario, however, is that the fragmentation and disparities that exist in the U.S. healthcare system will persist. It could be that some of those random connections that are being made won’t be enough to ameliorate the existing structural problems within our communities, where organizations within a given healthcare system operate as silos.

By trying to understand various mechanisms through which we can improve the performance of networks, we can learn how to reconfigure collaboration across organizational boundaries and design better networks so that we can maximize the potential of our excellent clinicians, hospitals and medical infrastructure in serving their communities.

Dennie Kim is an Assistant Professor of Business Administration at the University of Virginia Darden School of Business. Gosia Glinska is an Associate Director of Research and Intellectual Capital, Batten Institute for Entrepreneurship & Innovation.