The US health care system is characterized by numerous ills such as poor customer satisfaction, low healthcare quality, increased prices and low coverage. These problems are only symptoms of the underlying problems in healthcare. As a result of the serious setbacks with health delivery models currently in operation, a systematic analysis is necessary to ensure that the root cause of the problem is identified and the necessary solutions given. (Porter and Teisberg, 2006)
Definition of model trends in the US health care system
Model trends in the US health care system are the systems that facilitate clarification of one’s service lines. It is essential for any particular entity to understand the nature of business or service line they are offering the public. Model trends are essential in the US health care system because they determine the nature of customers that a health entity deals with. It also guides any given organization on client needs that ought to be addressed. Lastly, model trends affect the nature of order within the business. Model trends determine what health organizations think of the kind of value they can create in the market. This means that there should be an alignment of what the organization thinks of its business values and what the actual values are. This would be a prerequisite to great performance.
It should be noted that model trends in other lines of business are quite straight forward. However, the same cannot be said of health care delivery models. This is because traditional approaches to health care have been either too narrow or broad. For instance, there are some groups that consider themselves part of the hospital business while others consider themselves as part of the health care delivery business. The former group consists of hospitals that compete with other hospitals; this model is horizontally integrated. The latter model consists of mostly health policy experts who believe that health care delivery should be vertically integrated. Here, health insurance and health care delivery are considered as one and the same thing.
Additionally, some health entities may use models based on the nature of their business specialty. For instance, those who specialize in nephrology define their business model along that line. Also, this applies to hospitals; some hospitals may think of themselves as service line providers hence the divisions into surgery, urology and others. (Porter and Teisberg, 2006)
2 current trends in healthcare delivery models
Health care delivery models have moved away from direct intervention by the state, federal government and policy makers into competition based models. The first emerging trend to be analyzed in the essay is value-based competition. This model of health care provision shifts away from focusing on doctors, business functions or policy makers as the main subject in health care, instead, the model embraces the patient as the most critical entity. This is a holistic approach because it does not just focus on offering patients a range of specialty services, instead it encompasses the best service for every service offered. In the value based competition model, hospitals or practitioners need not dwell on perfecting just one aspect of health like surgery, but the emphasis is on the overall quality of health care in the system. This implies that practitioners should strive for quality in surgery, nursing, radiology and any other service needed by a particular patient. For instance, if a patient is diagnosed properly, then they can undergo the right treatment (which may involve surgery) thereafter, they need to receive good post surgery care and follow. By enhancing the value of all the services required by a particular patient then health care service delivery can be enhanced.
The second trend in health care provision is a soft regulatory model by policy makers. Regulatory approaches are seen as the traditional approach to health care delivery in the US. However, the new trend is on soft regulatory approaches. This comes about as a result of the following issues;
- High levels of the elderly in health care
- Technological proliferation
- Consumer awareness
- Emphasis on effective service provision
All these issues have caused increasing concerns about cost implications in health. Consequently, the government and other policy makers have been forced to embrace a softer approach to health care. The health care system today may not encourage direct government intervention. This means that a direct supply of health resources or health care providers may not necessarily be the best approach to health care. Instead, policy makers have embraced a guiding role. The main advantage of this kind of approach is the fact that patients are given equal access to medical care without any form of isolation. Additionally, this model also encourages equity in funding. Patients can gain access to health care regardless of their financial dispositions. This system goes a long way in protecting fairness; a fact that is seriously compromised in the latter approach of value based competition. (Porter and Teisberg, 2006)
How the transformation of healthcare influences each of the two health delivery models
Health care in the US has changed from its latter days. Patients have now become more informed about their rights and what health care providers must offer them. Consequently, there is a need for health care providers to embrace these changes. Health care delivery systems operating under the soft regulatory model have been affected by this transformation because astute administration of services is expected. Patients from various backgrounds expect equity and transparency in health care given the fact that they are very informed.
Heath care transformation affects the value based competition model because patients can now access all the health care options available to them through information technology. This means that in order to enhance value, hospitals need to do more than what they did a decade ago.
In the past, health care systems have been funded using an ineffective method. Health care systems would receive funds based on historical expenditures. Additionally, funding was done irrespective of the nature of the organization itself. It was a blanket model that offered little if any room for improvement of service delivery. However, these days there is a move toward funding based on service offering. The value based competition model and the soft regulatory approach are likely to be affected by this trend positively. This is because funding will be done on service basis; i.e. the nature of services that a given health practitioner has rather than their history. This will go a long way in stimulating creativity, production and quality services. Hospitals need not worry about expansion programs because there would be adequate funding for such programs since expansion is synonymous with increased numbers of services. (Porter and Teisberg, 2006)
Impact of current environmental trends on each health care delivery model
There are a wide range of environmental issues currently affecting the health care systems. All these factors influence health care differently depending on the model adopted. The issue of clinical outcome research is currently becoming an important factor in most health care delivery systems. The value based competition approach encourages the infusion of clinical research with patient care. This is because the model is based on improvement of service quality. This is an aspect that can be achieved very well using clinical research. On the other hand, the soft regulatory approach may not necessarily favor incorporating patient care with research. This model encourages separation of these two issues.
The second environmental issue is in relation to geography. Geography is critical to any given business in the health sector because it allows an in-depth understanding of the market to be served. The second trend is incorporation of the regional or national needs with health care services. This trend affects the value based competition model. According to the model, health practitioners need to eliminate factors that make them vulnerable to competitors. In this models, the issue of geography also facilitates partnerships across geographical spheres. The same may be said of the soft regulatory approach. Some health needs are synonymous with certain geographical locations. Consequently, the nature of resources availed or the type of regulation offered largely depends on the location. The latter issues indicate how geography will affect service provision in the soft regulatory approach. (Robinson & Dratler, 2006)
Description of an emerging contemporary trend in management in the US health care system
Health care organizations these days have started focusing on specialty services. There is a move from offering a range of services in a mediocre way to performance enhancement. Consequently, management system have become less centralized. The new trend is on empowering different health care functions to make independent decisions on their own.
Health care systems are now incorporating the need to give different specialists the ability to decide their own fate.
Effect of the latter health care trend on the health care organization leadership
Leadership in health care has had to embrace the latter trend. In this regard, organizations have been forced to redefine their business offering especially in relation to patient requirements. This means that the overall services offered have now become more specialized. Consequently, each entity has to control its own functions. Many health organizations have reduced vertical integration as decision making abilities are now common practice among the different health care functions.
Different hospitals and other heath care centers have adopted smaller strategies for individual practice units. This approach is quite different from the past approach that involved adopting a uniform organizational strategy for all parts of the hospital. Consequently, the overall hospital administration is not the only body given the responsibility to determine organizational strategy. Various practice units now have the mandate to perform the latter task. (Ginsburg, 2005)
Additionally, hospitals have begun checking on their performance through the following methods
- Measurement of results
- Assessing patient attitudes
- Assessing patient experiences
- Assessment of health care delivery methods
- Assessment of patient characteristics
Health care systems have also had to change the way they do business. For instance, their pricing strategies have been radically transformed. Most of them have now started offering single bills related to each service offered rather than offering a large package to cover all the health costs. This enhances accountability in those respective business functions because each of them can see their returns directly. This is quite different from the latter approach which promoted almost zero accountability. The blanket charges offered would camouflage efforts made by one business function.
Market services currently being offered in health institutions have changed as a result of this emerging trend. Health organizations now market themselves as businesses that offer very unique services to their clientele. Additionally some of them prefer emphasis on the excellence of their product package. This makes health organizations more competitive or market driven. (Tollen & Enthoven, 2005)
The last major effect of this emerging contemporary trend is greater growth of health institutions. Due to decentralization, services have improved and geographical expansion has been enhanced.
The essay examines two health delivery models in the US health care system. The first is the value based competition model. This model is patient centered and focuses on provision of quality services, it also leaves competition in the hands of the health practitioners rather than in the hands of the policy makers. The second model is the soft regulatory approach. According to the model, policy makers still regulate the health care system but they do so light handedly; they act as guides rather than controllers.
An emerging trend in the health care system that is likely to affect management systems is the issue of decentralized decisions making. This has affected organizational structure and functions in a number of ways. First, they have had to breakdown organizational strategy, billing systems have been transformed and marketing functions too.
Porter, M. and Teisberg, E. (2006): Redefining Health Care: Creating Value-Based Competition on Results; Harvard Business School Press, 54-67
Ginsburg, P. (2005): Competition In Health Care: Its Evolution Over The Past Decade, Health Affairs, 24, 6, 1512-1522.
Tollen, A.. & Enthoven, C. (2005): Competition In Health Care: It Takes Systems to Pursue Quality and Efficiency, retrieved from http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.420v1 accessed on 15th July 2008
Robinson, J. & Dratler, S. (2006): Corporate Structure and Capital Strategy at Catholic HealthcareWest; Health Affairs Journal; 25(1), 134-147