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Health Care Delivery in the United States

James R. Knickman Anthony R. Kovner Editors

Jonas & Kovner’s

11th Edition

Health Care Delivery in the United States James R. Knickman, PhD · Anthony R. Kovner, PhD Editors

Steven Jonas, MD, MPH, MS, FNYAS, Founding Editor

Knickm an

Kovner

Jonas & Kovner’s 11th Edition

11th Edition

9 780826 125279

ISBN 978-0-8261-2527-9

11 W. 42nd Street New York, NY 10036-8002 www.springerpub.com

“Health care managers, practitioners, and students must both operate as effectively as they can within the daunting and con- tinually evolving system at hand and identify opportunities for reform advances… Health Care Delivery in the United States has been an indispensable companion to those preparing to manage this balance. The present edition demonstrates once again why this volume has come to be so prized. It takes the long view – charting recent developments in health policy, and putting them side-by-side with descriptions and analysis of existing programs in the United States and abroad.”

—Sherry Glied, PhD, Dean and Professor of Public Service, NYU Wagner, From the Foreword

This fully updated and revised 11th edition of a highly esteemed survey and analysis of health care delivery in the United States keeps pace with the rapid changes that are reshaping our system. Fundamentally, this new edition presents the realities that impact our nation’s achievement of the so-called Triple Aim: better health and better care at a lower cost. It addresses challenges and responses to the Affordable Care Act (ACA), the implementation of Obamacare, and many new models of care designed to replace outmoded systems. Leading scholars, practitioners, and educators within population health and medical care present the most up-to-date evidence-based information on health disparities, vulnerable populations, and immigrant health; nursing workforce challenges; new information technology; preventive medicine; emerging approaches to control health care costs; and much more.

Designed for graduate and advanced undergraduate students of health care management and administration and public health, the text addresses all of the complex core issues surrounding our health care system in a strikingly readable and accessible format. Contributors provide an in-depth and objective appraisal of why and how we organize health care the way we do, the enormous impact of health-related behaviors on the structure, function, and cost of the health care delivery system, and other emerging and recurrent issues in health policy, health care management, and public health. The 11th edition features the writings of such luminaries as Michael K. Gusmanno, Carolyn M. Clancy, Joanne Spetz, Nirav R. Shah, Michael S. Sparer, and Christy Harris Lemak, among others. Chapters include key words, learning objectives and competencies, discussion questions, case studies, and new charts and tables with concrete health care data. Included for instructors is an Instructor’s Manual, PowerPoint slides, Syllabus, Test Bank, Image Bank, Supplemental e-chapter on the ACA, and a transition guide bridging the 10th and 11th editions.

Key Features: • Integration of the ACA throughout the text, including

a supplementary e-chapter devoted to this major health care policy innovation

• The implementation of Obamacare • Combines acute and chronic care into organizations

of medical care • Nursing workforce challenges • Health disparities, vulnerable populations, and

immigrant health • Strategies to achieve the Triple Aim (better health and

better care at lower cost)

• New models of care including accountable care organizations (ACOs), patient homes, health exchanges, and integrated health systems

• Emerging societal efforts toward creating healthy environments and illness prevention

• Increasing incentives for efficiency and better quality of care

• Expanded discussion of information technology • A new 5-year trend forecast

Jonas & Kovner’s Health Care Delivery in the United States

Jonas & Kovner’s

Health Care Delivery in the United States

Brief Contents

PART I: HEALTH POLICY

Chapter 1 The Challenge of Health Care Delivery and Health Policy 3

Chapter 2 A Visual Overview of Health Care Delivery in the United States 13

Chapter 3 Government and Health Insurance: The Policy Process 29

Chapter 4 Comparative Health Systems 53

PART II: KEEPING AMERICANS HEALTHY

Chapter 5 Population Health 79

Chapter 6 Public Health: A Transformation for the 21st Century 99

Chapter 7 Health and Behavior 119

Chapter 8 Vulnerable Populations: A Tale of Two Nations 149

PART III: MEDICAL CARE: TREATING AMERICANS’ MEDICAL PROBLEMS

Chapter 9 Organization of Care 183

Chapter 10 The Health Workforce 213

Chapter 11 Health Care Financing 231

Chapter 12 Health Care Costs and Value 253

Chapter 13 High-Quality Health Care 273

Chapter 14 Managing and Governing Health Care Organizations 297

Chapter 15 Health Information Technology 311

PART IV: FUTURES

Chapter 16 The Future of Health Care Delivery and Health Policy 333

Appendix Major Provisions of the Patient Protection and Affordable Care Act of 2010 343

Glossary 363

Index 379

James R. Knickman, PhD, is president and chief executive offi cer of the New York State Health Foundation (NYSHealth), a private foundation dedicated to improving the health of all New Yorkers, especially the most vulnerable. Under Dr. Knickman’s leadership, NYSHealth has invested more than $90 million since 2006 in initiatives to improve health care and the public health system in New York state. Central to the foundation’s mission is a commitment to sharing the results and lessons of its grantmaking; informing policy and practice through timely, credible analysis and commentary; and serving as a neutral convener of health care leaders and stakeholders throughout New York. Before joining NYSHealth, Dr. Knickman was vice president of research and evaluation, Robert Wood Johnson Foundation, and served on the faculty of New York University’s Robert F. Wagner Graduate School of Public Service. He serves on numerous boards, including the National Council on Aging and Philanthropy New York.

Anthony R. Kovner, PhD, is professor of management at New York University’s Robert F. Wagner Graduate School of Public Service. He has directed the executive MPA in manage- ment, the concentration for nurse leaders, the program in health policy and management, and the advanced management program for clinicians at NYU/Wagner. He was a senior program consultant to the Robert Wood Johnson Foundation’s rural hospital program and was senior health consultant to the United Autoworkers Union. He served as a manager for 12 years in all, in a large community health center, a nursing home, an academic faculty practice, and as CEO at a community hospital. Professor Kovner is the author or editor, with others, of 11 books, 48 peer-reviewed articles, and 33 published case studies. He was the fourth recipient, in 1999, of the Filerman Prize for Educational Leadership from the Association of University Programs in Health Administration.

Jonas & Kovner’s

Health Care Delivery in the United States 11th Edition

James R. Knickman, PhD Anthony R. Kovner, PhD Editors

Steven Jonas, MD, MPH, MS, FNYAS Founding Editor

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Jonas and Kovner’s health care delivery in the United States / [edited by] James R. Knickman, Anthony R. Kovner.—11th edition. p. ; cm. Health care delivery in the United States Editors’ names reversed on the previous edition. Preceded by: Jonas & Kovner’s health care delivery in the United States. Includes bibliographical references and index. ISBN 978-0-8261-2527-9—ISBN 978-0-8261-2529-3 (e-book) I. Knickman, James, editor. II. Kovner, Anthony R., editor. III. Title: Health care delivery in the United States. [DNLM: 1. Delivery of Health Care—United States. 2. Health Policy—United States. 3. Health Services—United States. 4. Quality of Health Care—United States. W 84 AA1] RA395.A3 362.10973—dc23 2014045558

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v

Contents

LIST OF TABLES AND FIGURES xi

FOREWORD Sherry Glied xiii

ACKNOWLEDGMENTS xv

ORGANIZATION OF THIS BOOK xvii

CONTRIBUTORS xix

PART I: HEALTH POLICY

CHAPTER 1 THE CHALLENGE OF HEALTH CARE DELIVERY AND HEALTH POLICY 3 James R. Knickman and Anthony R. Kovner

Context 3 Th e Importance of Good Health to American Life 4 Defi ning Characteristics of the U.S. Health System 5 Major Issues and Concerns 6 Key Stakeholders Infl uencing the Health System 8 Organization of Th is Book 11 Discussion Questions 12 Case Study 12 Bibliography 12

CHAPTER 2 A VISUAL OVERVIEW OF HEALTH CARE DELIVERY IN THE UNITED STATES 13 Catherine K. Dangremond

Th e U.S. Health Care System: A Period of Change 13 Th e Shared Responsibility for Health Care 14 Where the Money Comes From, and How It Is Used 16 A Comparative Perspective 16 Population Health: Beyond Health Care 17 Access to Care and Variation in Health Outcomes 19 Health and Behavior 20 Th e Health Care Workforce 21 Variations in Health Care Delivery 22 Health Care Quality 23 Health Care Cost and Value 24 Th e Future of Health Care Delivery 26 References 27

SHARE JONAS & KOVNER ’S HEALTH CARE DELIVERY IN THE UNITED STATES: 11th EDITION

Contentsvi

CHAPTER 3 GOVERNMENT AND HEALTH INSURANCE: THE POLICY PROCESS 29 Michael S. Sparer and Frank J. Thompson

Context 29 Th e Government as Payer: Th e Health Insurance Safety Net 30 Government and Health Insurance: Th e Policy Process 41 Conclusion 49 Discussion Questions 49 Case Study 50 References 50

CHAPTER 4 COMPARATIVE HEALTH SYSTEMS 53 Michael K. Gusmano and Victor G. Rodwin

Overview 53 Health System Models 55 NHS and NHI Systems Compared With the United States 57 Th e Health Systems in England, Canada, France, and China 58 Lessons 70 Discussion Questions 71 Case Study 72 References 72

PART II: KEEPING AMERICANS HEALTHY

CHAPTER 5 POPULATION HEALTH 79 Pamela G. Russo

Context 79 Th e Population Health Model 80 Th e Medical Model 82 Comparing the Medical and Population Health Models 83 Th e Infl uence of Social Determinants on Health Behavior and Outcomes 85 Leading Determinants of Health: Weighting the Diff erent Domains 89 Health Policy and Returns on Investment 90 Conclusion 94 Discussion Questions 95 Case Study 96 References 97

CHAPTER 6 PUBLIC HEALTH: A TRANSFORMATION FOR THE 21ST CENTURY 99 Laura C. Leviton, Paul L. Kuehnert, and Kathryn E. Wehr

Who s in Charge of Public Health? 99 A Healthy Population Is in the Public Interest 102 Core Functions of Public Health 106 Governmental Authority and Services 108 Rethinking Public Health for the 21st Century 112 Discussion Questions 116 Case Study 117 References 117

’

Contents vii

CHAPTER 7 HEALTH AND BEHAVIOR 119 Elaine F. Cassidy, Matthew D. Trujillo, and C. Tracy Orleans

Behavioral Risk Factors: Overview and National Goals 120 Changing Health Behavior: Closing the Gap Between Recommended and Actual Health Lifestyle Practices 126 Changing Provider Behavior: Closing the Gap Between Best Practice and Usual Care 137 Conclusion 142 Discussion Questions 143 Case Study 144 References 144

CHAPTER 8 VULNERABLE POPULATIONS: A TALE OF TWO NATIONS 149 Jacqueline Martinez Garcel, Elizabeth A. Ward, and Lourdes J. Rodríguez

Understanding Vulnerable Populations and Th eir Context 150 Th e Growing Number of Vulnerable Populations 153 Organization and Financing of Health Care and Other Services for Vulnerable Populations 158 Social Service Needs 162 Federal and State Financing of Care for Vulnerable Populations 164 Challenges for Service Delivery and Payment 165 Emerging and Tested Ideas for Better Health Delivery 167 Conclusion 174 Discussion Questions 175 Case Study 176 References 176

PART III: MEDICAL CARE: TREATING AMERICANS’ MEDICAL PROBLEMS

CHAPTER 9 ORGANIZATION OF CARE 183 Amy Yarbrough Landry and Cathleen O. Erwin

Description of the Current Care Delivery System 184 Th e Future of the Delivery System 202 Best Practices 207 Looking Forward 208 Discussion Questions 209 Case Study 209 References 210

CHAPTER 10 THE HEALTH WORKFORCE 213 Joanne Spetz and Susan A. Chapman

Who Is Part of the Health Workforce? 214 Traditional Approaches to Health Workforce Planning 215 Health Workforce Education 216 Critical Issues for the Health Workforce 218 Conclusion: Building the Future Health Care Workforce 224

Contentsviii

Discussion Questions 224 Case Study 225 References 225

CHAPTER 11 HEALTH CARE FINANCING 231 James R. Knickman

General Overview of Health Care Financing 232 What the Money Buys and Where It Comes From 234 How Health Insurance Works 235 How Providers Are Paid for the Health Services Th ey Deliver 240 Specialized Payment Approaches Used by Payers 241 Issues Shaping the Future of Health Care Financing 244 Conclusion 249 Discussion Questions 250 Case Study 251 References 251

CHAPTER 12 HEALTH CARE COSTS AND VALUE 253 Thad Calabrese and Keith F. Safi an

Th e Issue of Health Care Spending Growth 254 Conclusion 269 Discussion Questions 269 Case Study 270 References 270

CHAPTER 13 HIGH-QUALITY HEALTH CARE 273 Carolyn M. Clancy and Irene Fraser

Defi ning Quality 274 How Are We Doing? 274 How Do We Improve Quality? 275 How Do We Incentivize Quality Care? 281 What Are Major Recent Developments Aff ecting Quality? 289 Core Competencies for Health Administrators 292 Conclusion 293 Discussion Questions 294 Case Study 294 References 295

CHAPTER 14 MANAGING AND GOVERNING HEALTH CARE ORGANIZATIONS 297 Anthony R. Kovner and Christy Harris Lemak

Governing Boards and Owners 298 Management Work 301 Conclusion 308 Discussion Questions 308 Case Study 309 References 309

Contents ix

CHAPTER 15 HEALTH INFORMATION TECHNOLOGY 311 Nirav R. Shah

HIT Defi ned 312 Th e Backing of Government 315 Transformative Powers of HIT 316 HIT at the VA 321 Th e New York Experience 322 Implementing HIT 323 Challenges and Shortcomings of HIT 324 Toward the Future 325 Discussion Questions 326 Case Study 327 References 327

PART IV: FUTURES

CHAPTER 16 THE FUTURE OF HEALTH CARE DELIVERY AND HEALTH POLICY 333 James R. Knickman and Anthony R. Kovner

Dynamics Infl uencing Change 334 Aspects of the Health System Th at Are Set to Change by 2020 335 Future Prospects for Diff erent Stakeholders in the Health Enterprise 339 Conclusion 341 Discussion Questions 341 Case Study 342 Bibliography 342

APPENDIX Major Provisions of the Patient Protection and Aff ordable Care Act of 2010 343

GLOSSARY 363

INDEX 379

xi

List of Tables and Figures

Chapter 2 Table 2.1 Th e diverse U.S. health care workforce. 22 Figure 2.1 Consumer perceptions of the U.S. health care system. 13 Figure 2.2 Th e role of government in health care. 14 Figure 2.3 Signifi cant health policy milestones, 1965–present. 15 Figure 2.4 Sources and uses of health care funding, 1970 and 2012. 17 Figure 2.5 Association between health care spending per capita and life expectancy. 18 Figure 2.6 Growth in obesity rates, 2000–2010. 18 Figure 2.7 Usual source of care by income level. 19 Figure 2.8 Adequate control of cholesterol by income level. 20 Figure 2.9 UWPHI county health rankings model of health improvement. 21 Figure 2.10 Th e Commonwealth Fund’s scorecard on local health system performance. 24 Figure 2.11 Th e factors that infl uence a patient’s choice of hospital. 25 Figure 2.12 Adjusted charges and discount prices for uncomplicated caesarean sections across

California hospitals, 2011. 26 Figure 2.13 Consumer perception of Aff ordable Care Act next steps. 27

Chapter 4 Table 4.1 Health system provision and fi nancing. 56 Table 4.2 Health care expenditure as a share of GDP: Selected countries, 2011. 66

Chapter 5 Figure 5.1 A guide to thinking about determinants of population health. 81 Figure 5.2 Association between health care spending per capita and life expectancy. 82 Figure 5.3 Gradients within gradients: Education is linked with health. 87 Figure 5.4 Health-related behaviors and education both aff ect health. 88 Figure 5.5 County health rankings model. 91

Chapter 6 Table 6.1 Ten great public health achievements: United States, 1900–1999. 103 Table 6.2 Diff erences between the roles of individual medical care and public health. 105 Figure 6.1 Th e public health system at the local level. 101 Figure 6.2 Th e circle of public health activities and 10 essential services. 106

Chapter 7 Table 7.1 Selected Healthy People 2020 objectives: Behavioral risk factors. 122 Table 7.2 Th e population-based intervention model. 133 Figure 7.1 Comprehensive approach to changing provider practice. 140

L is t o f Tables and F iguresxii

Chapter 8

Figure 8.1 Projection of growth in chronic illness prevalence. 154

Chapter 9 Table 9.1 Registered hospitals in the United States by type and ownership status. 191 Table 9.2 Standards for patient-centered medical homes. 203 Figure 9.1 Domains in acute care. 187

Chapter 10 Table 10.1 Largest health care occupations in the United States. 215

Chapter 11

Table 11.1 National health expenditures (in $ billions), selected categories and years, 1970–2020. 234

Figure 11.1 U.S. national health expenditure as a share of GDP, 1970–2020. 234 Figure 11.2 Medicaid enrollments and expenditures for year 2010. 237

Chapter 12 Table 12.1 Average annual after-tax expenditures by consumer units/households, 2012. 256 Table 12.2 Health care spending as a percentage of GDP for OECD countries. 257 Figure 12.1 Annual change in health care spending and GDP, 1963–2012. 254

Chapter 13 Figure 13.1 Improving care through system redesign. 276 Figure 13.2 Number of state public-reporting mandates by provider category. 284

xiii

Foreword

Th is, the 11th edition of Health Care Delivery in the United States, appears at an unprecedented moment in the evolution of the U.S. health care system. After decades of relentless increases in the number of uninsured residents, more Americans today hold health insurance coverage than at any time in the past. In the wake of the Aff ord- able Care Act coverage expansion, which began in January 2014, the share of the popu- lation uninsured has fallen to levels last seen more than 30 years ago. On the cost front, real per capita spending over the past 4 years has grown at the slowest rate on record. For the 8th year in a row, the Congressional Budget Offi ce has revised down- ward its projections of Medicare cost growth. Although the exceptional slowdown of overall health spending is largely due to the eff ects of the Great Recession, changes to payment policies and levels enacted in the health reform law may claim credit for some of the good Medicare news.

Th e new law, as well as changes in private insurer practices, also seems to have encouraged the proliferation of novel forms of health care delivery that seek to gen- erate the quality and cost benefi ts long associated with high-performing vertically integrated health care institutions. Some evidence suggests that these incentives have contributed to reductions in readmission rates and health care-acquired infections.

On the public health front, decades of educational eff orts, incentives, and inter- ventions, often based on academic evidence, have also led to signifi cant improve- ments. Teen and adult smoking rates are at all-time lows, and the teen birth rate has fallen almost continuously over the past 20 years. Th ese improvements are testimony to vibrant and creative eff orts in health fi nancing, delivery, and public health.

It is comforting and reassuring to imagine that the U.S. health system has settled into a more sustainable, equitable, and eff ective path. But that sanguine image belies both the condition of our health system and the history of health reform elsewhere. It is true that uninsurance rates have dropped dramatically in some states—but many others have rejected the coverage expansions. A concerted eff ort in the courts and in Congress seeks to roll back the gains that have already been made. Slower cost growth off ers the system some breathing room, but almost all analysts predict that the changes in payments and organizations will not be suffi cient to hold spending at supportable levels. Even under the most optimistic scenarios, as the baby boom generation ages, health care will consume a growing share of the gross domestic product and of the fed- eral budget. Health reform and insurer ingenuity have brought an abundance of new organizational forms, but the jury is out on whether these will actually improve quality and reduce costs. U.S. health outcomes, especially for the most vulnerable popula- tions, remain abysmally low in a comparative perspective, and the evidence suggests that inequality in health outcomes is growing.

Students of health care policy and delivery need to chart a middle course: nei- ther complacently optimistic about the promise of a new regime, nor overly discour- aged by the still-dismal U.S. context. Instead, as the experience of other countries suggests, we should recognize that health care system reform is a never-ending task. After all, Chancellor Otto von Bismarck initiated the German health insurance system in 1883—and Chancellor Angela Merkel completed the most recent German health insurance reform, building on Bismarck’s model, in 2011. Similarly, even though much

Forewordxiv

has changed, our health care system continues to resemble (quite closely) the system described in the fi rst edition of Health Care Delivery in the United States, published in 1977. No doubt a student of the future, scanning this 11th edition in 2050, will recog- nize many similarities to the health system he or she knows and will also see evidence of the decades of reform that will consume policymakers and delivery system manag- ers between now and then.

Health care managers, practitioners, and students must both operate as eff ectively as they can within the daunting and continually evolving system at hand and identify opportunities for reform advances. For nearly 40 years—27 of them at least in part under the stewardship of Tony Kovner—Health Care Delivery in the United States has been an indispensable companion to those preparing to manage this balance. Th e present edition demonstrates once again why this volume has come to be so prized. It takes the long view—charting recent developments in health policy and putting them side-by-side with descriptions and analysis of existing programs in the United States and abroad. Novelty gets its due, but so does context. Th e text recognizes that health is, after all, the ultimate object of health care delivery, and so provides a thorough assessment of population health. It explores the key elements of the health care deliv- ery system, from both the supply and the demand sides. In addition, it recognizes that the delivery system doesn’t stand alone and examines the structures and processes— technological, governmental, and organizational—that underpin the system.

Health Care Delivery in the United States profi ts from the editorship of two highly experienced observers of the health care system: James Knickman and Anthony Kovner. Jim, once a faculty member at Wagner, is now president and CEO of the New York State Health Foundation, which, under his stewardship, has been an impor- tant contributor to reform of the New York state health system. Tony is, to my delight, my colleague at the Wagner School. He has been a mentor and guide to generations of health care managers and policymakers, both at a distance, as contributor and editor to this text, and as a classroom teacher and adviser. He has transformed the lives of his students, and they, as leaders in health care institutions around the country, have transformed their institutions and the lives of their patients. Tony inculcates in his students—as he has in me—a conviction that policy and management can, should, and must be founded on the best possible evidence. Founding decisions on evidence is not just a mantra—it means asking the right questions, identifying the appropriate literature, and assessing the applicability and quality of this research. In this volume, Tony and Jim have put that system to work, and it is this foundation in rigorous evi- dence that allows the text to stand the test of time and to be responsive and useful in addressing current developments.

Sherry Glied, PhD Dean, New York University

Robert F. Wagner School of Public Service New York, New York

xv

Acknowledgments

Th e editors would like to express deep appreciation to the team of people who made this book possible. First, we thank our 29 authors of the 16 chapters that comprise the book. Th ey are all noted experts in their fi elds, and we appreciate their willingness to translate their knowledge into chapters that introduce future leaders to the workings of the U.S. health system. Second, we wish to acknowledge the superb editorial role played by Sheri W. Sussman and the quality control of production under Joanne Jay’s direction at Springer Publishing Company. We appreciate Sheri’s insights about how to publish a textbook and have benefi ted from Joanne’s keeping the process moving in creating an eff ective and enjoyable learning experience for HCDUS readers. Christine Kovner frequently helped to strengthen the book, reading various chapters and off er- ing advice from her vantage as one of the leading nursing researchers in the country. At the New York State Health Foundation, Susan Illman, Emily Parker, and Amy Shefrin each provided valued assistance gathering current data to inform the book. Finally, we would like to acknowledge Steve Jonas, who originated this book 11 editions ago.

xvii

Organization of This Book

Th is is the 11th edition of Jonas and Kovner’s Health Care Delivery in the United States, which, although its title has evolved in the last 35 years, has stayed true to its original purpose: helping instructors and students better understand the complicated, expen- sive, and ever-changing U.S. health care delivery system and the public health system. It is a privilege to be able to work with instructors around the world to introduce the leaders of tomorrow to the health fi eld.

Our nation is embarked on an ambitious attempt to reshape how we go about taking care of the health concerns of our population. On the one hand, there is a new energy to develop initiatives that focus on keeping people healthy. On the other hand, there is a great deal of experimenting with the organization of the care system that addresses the needs of people who have medical problems associated with injuries and disease. Th e aim of this experimentation is to improve the quality of medical care and to bring costs in line with what Americans can aff ord and want to spend on the health sector.

Th is text is organized to address both the challenge of keeping people healthy (Part II) and the challenge of delivering good medical care that helps people recover from medical conditions that do occur (Part III). In addition, we have included a sec- tion that describes the current status of the U.S. health care system and explains the complicated public policy process that has so much infl uence on the way health care is delivered and fi nanced in this country (Part I). Th e text ends with a consideration of where the health system might be headed in the years to come (Part IV).

Each chapter starts with a list of key words that are central to the chapter’s focus, a list of the learning objectives addressed by the chapter, and an outline of what is to come. Each chapter ends with a list of discussion questions and a case study, encourag- ing the reader to apply the ideas of the chapter to real-life issues and challenges that face health care leaders focused on management issues and policy issues.

In addition to this text, an online Instructors’ Manual, which includes a variety of background materials that teachers will fi nd useful in guiding class discussion, is available. It also off ers additional resources and class projects that are useful to students and the learning process. In addition, PowerPoints, Syllabus, Test Bank, and Transition Guide are available to instructors via textbooks@springerpub .com

Students are encouraged to visit ushealthcaredelivery.com for additional materials including an updated supplementary chapter on the Patient Protection and Aff ordable Care Act.

We encourage instructors and students to communicate with us about this edi- tion, so that we may make the 12th edition even more useful to you. Please submit any comments or questions to us at knickman@nyshealth.org and anthony.kovner@nyu. edu, and we will get back to you. As always, we appreciate your suggestions.

Anthony R. Kovner, PhD James R. Knickman, PhD

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xix

Contributors

Thad Calabrese, PhD, is an assistant professor of public and nonprofi t fi nancial man- agement at New York University’s Robert F. Wagner Graduate School of Public Service. Dr. Calabrese is the coauthor of two textbooks on fi nancial management with applications to government and nonprofi t organizations, including health care organizations. Financial Management for Public, Health, and Not-for-Profi t Organizations (4th edition) was writ- ten with Steven Finkler, Robert Purtell, and Daniel L. Smith. Accounting Fundamentals for Health Care Management (2nd edition) was written with Steven Finkler and David Ward. Dr. Calabrese’s research applies the principles of corporate fi nance to organizations involved in the production or coproduction of public goods and services. He teaches courses on fi nancial management for health care organizations and also for nonprofi t organizations.

Elaine F. Cassidy, PhD, is a senior consultant in research and evaluation at consulting fi rm Equal Measure, where she manages projects related to health promotion, particularly among under-privileged populations. Before joining Equal Measure, Dr. Cassidy served as a program offi cer in research and evaluation at the Robert Wood Johnson Founda- tion, where she oversaw research and evaluation activities for the Vulnerable Populations portfolio. Her work and professional interests focus primarily on child and adolescent health and risk behavior, violence prevention, and school-based interventions, primar- ily for young people living in low-income, urban environments. She is a trained school psychologist and mental health clinician who has provided therapeutic care to children and families in school, outpatient, and acute partial hospitalization settings. She holds an MSEd in psychological services from the University of Pennsylvania and a PhD in school, community, and child-clinical psychology from the University of Pennsylvania.

Susan A. Chapman, PhD, RN, FAAN, is professor in the Department of Social and Behavioral Sciences, University of California, San Francisco School of Nursing, and fac- ulty at UCSF’s Center for Health Professions and the Institute for Health Policy Studies. She is codirector of the masters and doctoral programs in health policy at the School of Nursing. Her scholarly work focuses on health workforce research, health policy analysis, and program evaluation. Susan’s workforce research focuses on transforming models of primary care to address new and expanded roles for the health care workforce and the long-term care workforce. Susan received a BS from the University of Iowa, MS from Boston College, MPH from Boston University, and PhD in Health Services and Policy Analysis from UC Berkeley.

Carolyn M. Clancy, MD, is Interim Under Secretary for Health at the Department of Veterans Aff airs, having joined the VA in 2013 as Assistant Deputy Under Secretary for Health for Quality, Safety and Value. Prior to VA, she was director of the federal Agency for Healthcare Research and Quality (AHRQ) for ten years and also was director of AHRQ’s Center for Outcomes and Eff ectiveness Research. Dr. Clancy, a general internist and health services researcher, is a graduate of Boston College and the University of Massachusetts Medical School. Aft er her clinical training in internal medicine, she was a Henry J. Kaiser Family Foundation Fellow at the University of Pennsylvania. Dr. Clancy holds an aca- demic appointment at the George Washington University School of Medicine and serves as senior associate editor for the journal Health Services Research. She serves on multiple

Contr ibutorsxx

editorial boards, is a member of the Institute of Medicine, and was elected a master of the American College of Physicians in 2004. In 2009, she was awarded the William B. Graham Prize for Health Services Research. Dr. Clancy’s major research interests include improv- ing health care quality and patient safety and reducing disparities in care associated with race, ethnicity, gender, income, and education. As director of AHRQ, she launched the fi rst annual report to Congress on health care disparities and health care quality.

Catherine K. Dangremond, MPA, is currently an administrative fellow at the Yale New Haven Health System. Her professional interests lie at the intersection of health care deliv- ery and health policy, particularly the eff ects of this intersection on health system strategy and improvement in the delivery of health care and health outcomes. Ms. Dangremond holds an MPA from New York University’s Robert F. Wagner Graduate School of Public Service. She previously worked as a process improvement consultant and business devel- opment professional, focused in the health care provider and government sectors.

Cathleen O. Erwin, PhD, MBA, is an assistant professor of health services administra- tion in the Department of Political Science at Auburn University. Before her academic career, she worked for many years in administration, development, and communica- tions for nonprofi t organizations in the arts, health care, and higher education. Dr. Erwin received her doctoral degree in administration-health services from the University of Alabama at Birmingham. Her research primarily revolves around strategic management, organizational performance, and governance in health care organizations. Dr. Erwin’s teaching portfolio includes courses in health care delivery systems, health insurance and reimbursement, health care quality management, health information technology, and fundraising for nonprofi t organizations. She is a past president of the Alabama Health- care Executives Forum, the state chapter of the American College of Healthcare Execu- tives (ACHE), and is an appointed member of the board for the Health Care Management Division of the Academy of Management.

Irene Fraser, PhD, is a political scientist who has focused her work on Medicaid, private health insurance, and health care delivery. Since 1995, she has been at the Agency for Health- care Research and Quality, where she is director of the Center for Delivery, Organization, and Markets. Dr. Fraser spent 8 years at the American Hospital Association, as senior policy manager on indigent care, Medicaid, and health care reform, and director of Ambulatory Care. Before that, Dr. Fraser was associate professor of Political Science, director of the public policy program at Barat College, and adjunct faculty to the Institute for Health Law at Loyola School of Law. Dr. Fraser’s work has appeared in Health Aff airs, Inquiry, Health Care Financing Review, Medical Care Research and Review, Journal of Healthcare Manage- ment, Journal of Ambulatory Care Management, Health Services Research, and Journal of Health Politics, Policy and Law. She has a BA in political science and Spanish from Chatham College, and a PhD in political science from the University of Illinois.

Jacqueline Martinez Garcel, MPH, is vice president at the New York State Health Foundation (NYSHealth). Ms. Martinez Garcel serves as a key adviser to the president and CEO and has a central role in developing the foundation’s program areas, iden- tifying emerging opportunities and strategic niches, building partnerships with other foundations, and evaluating the performance of programs and grantees. Before joining

Contr ibutors xxi

NYSHealth, she served as the Executive Director for the Northern Manhattan Com- munity Voices Collaborative (Community Voices). Th e mission of Community Voices, funded by the W.K. Kellogg Foundation, is to improve access and quality of care for vulnerable populations. Ms. Martinez Garcel also worked with Dr. H. Jack Geiger at the City University of New York to complete an analysis of racial and ethnic disparities in diagnosis and treatment in the U.S. health care system. She has served as an NIH fellow for the Department of Public Health in the City of Merida in Yucatan, Mex- ico, and an adjunct professor of sociology at the Borough of Manhattan Community College. She is a board director for the Institute for Civic Leadership and for NAMI- New York City Metro. She holds a MPH from Columbia University and a BS from Cornell University.

Michael K. Gusmano, PhD, is a research scholar at Th e Hastings Center. Dr. Gusmano’s research interests include inequalities in health and theories of social jus- tice. He is one of the associate editors of Making Diffi cult Decisions with Patients and Families: A Singapore Casebook. His previous books include Health Care in World Cities (with Victor G. Rodwin and Daniel Weisz), Healthy Voices/Unhealthy Silence: Advocating for Poor People’s Health (with Colleen Grogan), and Growing Older in World Cities (coedited with Victor G. Rodwin). Dr. Gusmano holds a PhD in politi- cal science from the University of Maryland at College Park and an MPP from SUNY Albany. He was a Robert Wood Johnson Foundation scholar in health policy at Yale University and is a member of the editorial committee of Th e Hastings Center Report and the editorial boards of Health Economics, Policy and Law, and the Journal of Health Politics, Policy and Law.

Paul L. Kuehnert, DNP, RN, is the team director for the Bridging Health and Health Care Portfolio at the Robert Wood Johnson Foundation in Princeton, New Jersey. Imme- diately before coming to RWJ, Paul was the county health offi cer and executive director for health for Kane County, Illinois, a metro Chicago county of 515,000 people, for 5 years. In this role, Dr. Kuehnert provided executive leadership and oversight to four county departments: Health, Emergency Management, Community Reinvestment, and Animal Control. Before working in Kane County, Dr. Kuehnert served as deputy state health offi cer and deputy direc- tor of the state of Maine’s health department. Dr. Kuehnert is a pediatric nurse practitioner and holds a DNP in executive leadership as well as an MS in public health nursing from Uni- versity of Illinois at Chicago. He was named a Robert Wood Johnson Foundation executive nurse fellow in 2004.

Amy Yarbrough Landry, PhD, is an assistant professor in the Department of Health Services Administration at the University of Alabama at Birmingham. She teaches Introduction to Health Systems and Comparative Health Systems to masters and doc- toral students in her department. Dr. Landry’s research interests pertain to the strategic management of health care organizations in a variety of contexts, including acute care hospitals, long-term care organizations, Medicaid managed care organizations, and phy- sician organizations. Dr. Landry has also done research surrounding leadership in health care organizations. In particular, she is interested in executive selection, training, and development.

Contr ibutorsxxii

Christy Harris Lemak, PhD, FACHE, is professor and chair of the Department of Health Services Administration at the University of Alabama at Birmingham. Dr. Lemak teaches and conducts scholarship in the areas of health care management and leadership, with an emphasis on how leadership and organizational factors lead to high performance in health care. Her research includes studies of a complex pay-for-performance incentive program for physicians, and relationships among organizational culture, management practice, and surgical outcomes in a multihospital surgical collaborative. Dr. Lemak has extensively studied how Medicaid policy demonstrations aff ect hospitals, health plans, and relationships among provider organizations. She is currently examining new ways of measuring hospital and health system performance. She holds a PhD in health services organization and policy from the University of Michigan, MHA and MBA degrees from the University of Missouri-Columbia, and a BS in health planning and administration from the University of Illinois.

Laura C. Leviton, PhD, is special advisor for evaluation at Robert Wood Johnson Foundation, Princeton, New Jersey. She has been with the foundation since 1999, over- seeing more than 100 national and local evaluations. She was formerly a professor at two schools of public health, where she collaborated on the fi rst randomized experiment on HIV prevention, and later on two large place-based randomized experiments on improving medical practices. She received the 1993 award from the American Psycho- logical Association for Distinguished Contributions to Psychology in the Public Inter- est. She has served on three Institute of Medicine committees and was appointed by the secretary of DHHS to CDC’s National Advisory Committee on HIV and STD Preven- tion. Dr. Leviton was president of the American Evaluation Association in 2000 and has coauthored two books: Foundations of Program Evaluation and Confronting Public Health Risks. She received her PhD in social psychology from the University of Kansas and postdoctoral training in research methodology and evaluation at Northwestern University.

C. Tracy Orleans, PhD, is the senior scientist for the Robert Wood Johnson Foundation and has led or coled the foundation’s public policy and health care system grant-making in the areas of health behavior change, tobacco control, chronic disease management and prevention, physical activity promotion, and childhood obesity prevention during the past 18 years. During the past 6 years, she has focused mainly on discovering, evaluating, and applying eff ective policy and environmental strategies for reversing the rise in child- hood obesity and reducing the disparities in its prevalence and health tolls. She is now working to develop metrics and research that will help to create a broad culture of health nationwide. Dr. Orleans has authored or coauthored more than 250 publications, served on numerous journal editorial boards, on national scientifi c panels and advisory groups (e.g., Institute of Medicine, U.S. Preventive Services Task Force, Community Preventive Services Task Force, National Commission on Prevention Priorities, National Collabora- tive on Childhood Obesity Research), and as the associate policy editor for the American Journal of Preventive Medicine. Dr. Orleans has received many awards for her national work in the fi elds of behavioral medicine, tobacco control, and childhood obesity preven- tion. Most recently, she was deeply honored, along with Drs. Jim Sallis and Mary Story, to receive the CDC’s Weight of the Nation Pioneering Innovation Award for Applied Obesity Research in 2012.

Contr ibutors xxiii

Lourdes J. Rodríguez, DrPh, serves as program offi cer for the New York State Health Foundation (NYSHealth) in the prevention area, disseminating evidence-based pro- grams, supporting promising prevention strategies, and leveraging additional resources for New York state. Before her current position, Dr. Rodríguez served as associate director of community partnerships for healthy neighborhoods at City Harvest, overseeing com- munity engagement activities. From 2004 to 2012 she was on the faculty at the Columbia University Mailman School of Public Health. She coedited a book examining community mobilization for health and has authored numerous publications on violence prevention, mental health, and active living. Dr. Rodríguez received a BS in industrial biotechnology from the University of Puerto Rico, an MPH from the University of Connecticut, and a DrPH from Columbia University.

Victor G. Rodwin, PhD, MPH, professor of health policy and management at the Robert F. Wagner Graduate School of Public Service, NYU, conducts research and teaches courses on community health and medical care, comparative analysis of health care sys- tems, and health system performance and reform. He has lectured widely on these topics in universities around the world, most recently at Sun Yat Sen University in Gouangzhou, Fudan University in Shanghai, Renmin University in Beijing, London School of Econom- ics, London School of Hygiene and Tropical Medicine, and the Institut d’Etudes Poli- tiques in Paris. Professor Rodwin was awarded the Fulbright-Tocqueville Distinguished Chair during the spring semester of 2010 while he was based at the University of Paris– Orsay. In 2000, he was the recipient of a 3-year Robert Wood Johnson Foundation Health Policy Investigator Award on “Megacities and Health: New York, London, Paris, and Tokyo.” His research on this theme led to the establishment of the World Cities Project (WCP)—a collaborative venture between Wagner/NYU and the International Longevity Center USA, which focuses on aging, population health, and the health care systems in New York, London, Paris, Tokyo, and Hong Kong, and among neighborhoods within these world cities.

Pamela G. Russo, MD, MPH, is a senior program offi cer at Robert Wood Johnson Foundation (RWJF) in Princeton, New Jersey. She was recruited to RWJF to lead the Population Health: Science and Policy team in 2000. Before RWJF, she was an associate professor of medicine, director of the Clinical Outcomes Section, and program codirec- tor for the master’s program and fellowship in clinical epidemiology and health services research at the Cornell University Medical Center in New York City. Dr. Russo earned her BS from Harvard College, with a major in the history and philosophy of science; her MPH in epidemiology from the University of California, Berkeley, School of Public Health; and her MD from the University of California, San Francisco. She completed a residency in general internal medicine at the hospital of the University of Pennsylva- nia and a combined clinical epidemiology and rheumatology fellowship at Cornell and the Hospital of Special Surgery. Dr. Russo is a member of the IOM Population Health Roundtable.

Keith F. Safi an, MBA, FACHE, served as the president and CEO of Phelps Memo- rial Hospital Center from 1989 through 2014. His career started as an assistant direc- tor at Kings County Hospital in Brooklyn, then assistant, associate, and senior associate

Contr ibutorsxxiv

administrator at NYU Medical Center. He served as the administrator of St. John’s Epis- copal Hospital in the Rockaways for 4 years before joining Phelps. During Mr. Safi an’s tenure, the hospital experienced extraordinary growth: from a $40 million operating bud- get to $245 million, from an 11% operating loss in 1988 to surpluses in 23 of the last 24 years, from 189 medical staff to 503, from 800 employees to more than 1,700, and from the 50th largest employer in Westchester to the 7th. He has received awards for his work in health care from the Dominican Sisters Family Health Service, the American College of Healthcare Executives, and the Hudson Valley Branch of the Arthritis Foundation. He is a fellow of the American College of Healthcare Executives. Mr. Safi an holds an MBA from the Wharton Graduate School of the University of Pennsylvania and undergraduate degrees in industrial engineering and electrical engineering from the University at Buff alo.

Nirav R. Shah, MD, MPH, is the chief operating offi cer for clinical operations for Kaiser Permanente’s Southern California region, a $20B health system with 14 hospitals and more than 3.7 million members. He is a graduate of Harvard College and Yale School of Medicine, was an RWJ Clinical Scholar at UCLA, and is board-certifi ed in Internal Medicine. Dr. Shah has been an attending physician at Bellevue Hospital in Manhattan, associate investigator at Geisinger Health in Pennsylvania, and a faculty member of NYU Medical Center in the section of value and comparative eff ectiveness. Most recently, he served as commissioner of the New York State Department of Health. Dr. Shah is an elected member of the Institute of Medicine of the National Academy of Sciences, and is a nationally recognized thought leader in patient safety and quality, health informa- tion technology, population health, and the strategies required to transition to lower-cost, patient-centered health care.

Michael S. Sparer, PhD, JD, is professor and chair in the Department of Health Policy and Management at the Mailman School of Public Health at Columbia University. Pro- fessor Sparer studies and writes about the politics of health care, with a particular empha- sis on the health insurance and health delivery systems for low-income populations and the ways in which intergovernmental relations infl uence policy. He is a two-time winner of the Mailman School’s Student Government Association Teacher of the Year award, as well as the recipient of a 2010 Columbia University Presidential Award for Outstanding Teaching. Professor Sparer spent 7 years as a litigator for the New York City Law Depart- ment, specializing in intergovernmental social welfare litigation. Aft er leaving the practice of law, he obtained a PhD in political science from Brandeis University. Sparer is a former editor of the Journal of Health Politics, Policy and Law and is the author of Medicaid and the Limits of State Health Reform, as well as numerous articles and book chapters.

Joanne Spetz, PhD, is a professor at the Institute for Health Policy Studies and in the Department of Family and Community Medicine and the School of Nursing at the Uni- versity of California, San Francisco. She is the associate director for research strategy at the UCSF Center for the Health Professions and the director of the UCSF Health Workforce Research Center. Her fi elds of specialty are labor economics, public fi nance, and econo- metrics. She has led research on the health care workforce, organization of the hospital industry, eff ects of health information technology, eff ects of medical marijuana policy on youth substance use, and quality of patient care. Dr. Spetz’s teaching is in the areas of quantitative research methods, health care fi nancial management, and health economics.

Contr ibutors xxv

Frank J. Thompson, PhD, is distinguished professor of public aff airs and administration at Rutgers-Newark and at the Rutgers Center for State Health Policy in New Brunswick, New Jersey. He has published extensively on issues of health policy and implementation, with particular attention to the eff ect of federalism. In 2008, Professor Th ompson received a Robert Wood Johnson Investigator Award to study the evolution of Medicaid policy during the Clinton, G.W. Bush, and Obama administrations. Th is research has led to several publications in scholarly journals and culminated in a book—Medicaid Politics: Federalism, Policy Durability, and Health Reform (2012). His book assesses the policy and political dynamics that fueled the dramatic expansion of Medicaid and established it as a key pillar of the Aff ordable Care Act. Professor Th ompson received his PhD in political science from the University of California, Berkeley. He is a fellow of the National Academy of Public Administration.

Matthew D. Trujillo, PhD, is a research associate in the Research, Evaluation, and Learning unit at the Robert Wood Johnson Foundation. Before coming to the founda- tion, Dr. Trujillo worked as an adjunct researcher at the RAND Corporation. He received his PhD in psychology and social policy from the Woodrow Wilson School of Public and International Aff airs at Princeton University. He specialized in prejudice and stereotyp- ing, and his research examines the relationship between racial and ethnic microaggres- sions, identity, and policy. Originally from Phoenix, Arizona, he received his bachelor’s degree in psychology from Arizona State University.

Elizabeth A. Ward is a program assistant at the New York State Health Foundation (NYSHealth). Ms. Ward supports grantmaking eff orts for projects under NYSHealth’s diabetes prevention and primary care priority areas. Before joining NYSHealth, she held a variety of positions in the public health and policy arena, including the consumer assistance program at the nonprofi t law fi rm Health Law Advocates and the health care advocacy organization Health Care for All, both located in her home town of Boston, Massachusetts. Ms. Ward also served as one of the inaugural volunteer members of the benefi ts and community outreach team for the Supplemental Nutrition Assistance Pro- gram (SNAP) at the Western MA Food Bank. Ms. Ward earned a BS public health, a BA in political science, and a certifi cate in public policy and administration from the Univer- sity of Massachusetts at Amherst.

Kathryn E. Wehr, MPH, program offi cer, joined the Robert Wood Johnson Founda- tion in 2010. Ms. Wehr focuses on discovering and investing in what works to promote and protect the nation’s health and to achieve the foundation’s vision where we, as a nation, strive together to build a culture of health enabling all in our diverse society to lead healthy lives, now and for generations to come. Previously, Ms. Wehr was a gradu- ate research assistant at the University of North Carolina–Chapel Hill Sheps Center for Health Services Research. She has also served as community projects coordinator for the Northeast Florida Healthy Start Coalition and as an AmeriCorps member of the North Florida Health Corps.

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Health Policy I

This fi rst section of the book presents an overview of how the U.S. health system works and how public policy infl uences its operations. Th e section also provides basic sta- tistics outlining the dimensions of the health enterprise and sets the U.S. system in the con- text of the approaches to delivering health care in other countries. At times, it is easiest to understand one health system by comparing it to what happens in other parts of the world.

Chapter 1, authored by the book’s two editors, acts as an overall introduction to the material that will be covered in the other 15 chapters of the book. Th is chapter starts by reviewing why health is so important to people and how that importance is translated into characteristics of the health care sector. Th e authors also explain the societal dynamics that have shaped the current state of the health system and explore the roles of seven diff erent types of stakeholders in shaping the system.

Chapter 2 off ers a set of charts that provide a statistical overview of the U.S. health system. Th e charts are organized around the topics that will be covered in the book, with key data displayed in a way that introduces the reader to the scale and scope of the system.

In Chapter 3, political scientists Michael Sparer and Frank Th ompson address how the public policy process works at the federal government and state government levels. Th ey review how policy is made and the forces that shape public policy in the United States. Th e chapter focuses principally on the roles government plays in funding and providing health insurance coverage for parts of the population and why government does not cover the entire population, as happens in many other developed countries around the world. Th is chapter also reviews the recent major expansion of insurance coverage mandated by the Patient Protection and Aff ordable Care Act of 2010.

Finally, Chapter 4, coauthored by Michael Gusmano and Victor Rodwin, compares the structure and traditions of the health care system in the United States to the systems in other parts of the world. In addition to reviewing how key aspects of the organization of health care vary across countries, the chapter takes a close look at health care delivery in England, Canada, France, and China as good examples of the diversity of approaches to operating health systems.

1 The Challenge of Health Care Delivery and Health Policy

James R. Knickman and Anthony R. Kovner

KEY WORDS

LEARNING OBJECTIVES o Understand the importance of health and health care to American life o Understand some defi ning characteristics of U.S. health care delivery o Identify major issues and concerns o Identify key interest groups (stakeholders) o Understand the importance of engaging a new generation of health leaders

TOP ICAL OUTLINE o Why health is so important to Americans o Factors that shape the structure of the delivery system o Seven key challenges facing the health system o Stakeholders who shape and are affected by how the health system is

organized and how it functions o The organization of the book

access to health care behavioral health health care delivery interest groups (stakeholders) Patient Protection and Affordable

Care Act

payment systems population health public health value workforce

■ Context

Our goal in editing this book is to provide a vibrant introduction to the U.S. health care system in a way that helps new students understand the wonders of health care. Th e book lays out the complexities of organizing a large sector of our economy to keep Americans healthy and to help people get better when they become ill. In addition, the book provides a framework to help professors engage students, with room for each professor to bring his or her perspective to the materials covered.

To introduce students to the many parts of the health system in the United States, we have engaged some of the leading thinkers and “doers” in the health sector to explain the parts of the system in which they are expert. Each author brings a diff erent

Part I . Heal th Po l icy4

perspective, and it is not our aim to present one voice on this topic. Rather, we have asked each author to lay out the facts about a given topic and to off er ideas about what he or she thinks must happen to improve a specifi c aspect of the health system.

In many ways, the text lays out a serious “to-do” list facing our health system and off ers individuals beginning a health-related career a guide to the types of challenges that could engage them. Th e authors explain how the health system works, what its challenges are, and how health professionals can contribute to the process of strengthening our sys- tem to make sure it works effi ciently and eff ectively at the task of keeping all of us healthy.

In this fi rst chapter, we explain the importance of the health system, provide an overview of how the system is organized, sketch out some of the challenges facing the overall system that are addressed in the book, and discuss the roles of fi ve types of key stakeholders involved in the health enterprise. We also provide the logic behind the topics the book addresses and explain the book’s organization.

■ The Importance of Good Health to American Life

Our nation is built on the idea that society should ensure an opportunity for “life, lib- erty, and the pursuit of happiness.” Th ese words, of course, are from the second sen- tence of our Declaration of Independence. Th e aspiration of ensuring “life” is the core goal of the health system. It is obvious that nothing is possible for an individual without life, and most of us would agree that health is among the core needs to live a vibrant, viable life. Good health is essential to participate in the political and social system, to work to support ourselves and our families, and to pursue happiness and a good life.

Our nation has invested a tremendous amount to learn how to keep people healthy and how to restore health when disease, injury, or illness occurs. In the 19th century, researchers and public health experts from the United States and other countries began to understand the role of germs in communicating disease and the importance of basic public health practices, such as ensuring clean water and safe sanitation to maintain health. In the 20th century, the science and art of medicine exploded, creat- ing amazing know-how to treat people who have diseases, injuries, and illnesses.

In response to the emerging know-how for delivering medical care, a large and complex health enterprise developed throughout the 20th century and continues to evolve. Th e pipeline of new ideas for better treating illnesses is quite full and prom- ises to lead to ever-expanding methods to restore health when Americans have life- threatening medical problems.

We use the word “enterprise” deliberately because the health system is a blend of an altruistic-oriented set of providers and activities mixed with a huge industry that accounts for a sizable portion of all economic activity in our society. Th e value we put on health has led us to devote just under 20% of our economic resources to medical care and health promotion. Fully 13% of all jobs in America are in the health sector. Each of us spends a sizable share of our income on the health care we need. We spend this money through taxes, which support a good share of the health enterprise, through foregone wages used by our employers to pay for health insurance, and by siz- able out-of-pocket health care expenses for which each of us is responsible.

Th us, the “pursuit of life,” listed as a core principle in the Declaration of Indepen- dence, not only has resulted in a set of social and political norms about the importance of good health to everyone in America but also has spurred a huge industry that aff ects

Chapter 1 . The Chal lenge of Heal th Care Del ivery and Heal th Po l icy 5

and is aff ected by society’s economic activity and economic decisions. To understand the health system, we need to understand not only the art and practice of medicine and public health but also the economic, organizational, and management issues that must be addressed to keep the health system eff ective, effi cient, and aff ordable in our over- all economic life. How we go about organizing and managing the health system and changing it over time can hurt or help both our health status and our economic status.

■ Defining Characteristics of the U.S. Health System

It is ironic that most health professionals think of themselves as working within the “health system” when in truth one of the fi rst defi ning features of what we call a sys- tem is that health-related activities are not ordered or organized as a single enterprise. Rather, eff orts to improve health and health care involve many types of actors and organizations working independently and with little coordination to make contribu- tions to improving health status. In particular, our current approach to delivering medical care has evolved and keeps evolving in a haphazard way shaped more by eco- nomic incentives and opportunities than by a central or logical design.

In recent years, we also have begun to recognize the clear diff erence between “maintaining health” and “restoring health” to a person who has a medical problem. Th e medical care system clearly takes charge of restoring health when people are ill. Often the medical care system takes charge of caring for people even if restoring health is impossible; the goal may be to limit the spread of a medical problem, to alle- viate the symptoms of a medical problem, or to help a person cope with the pain and suff ering and loss of function when major medical problems emerge. Doctors, nurses, technicians of various types, hospitals, nursing homes, rehabilitation centers, pharma- ceutical companies, and medical device companies are among the actors who engage in eff orts to care for people when they have medical problems.

Th e goal of “maintaining health” also involves many actors and activities. To some extent, medical providers help with this huge task by providing screening and preven- tion services that can keep people from becoming ill and help to identify illnesses very early when they might be easier to treat. However, good health among a population also requires a vibrant public health system that works to help people avoid illness. Public health activities include preventing epidemics; making sure food, water, and sanitation are safe; monitoring environmental toxins; and developing community- based initiatives, public awareness initiatives, and education initiatives to help people eat healthy foods, exercise, and not engage in unhealthy behaviors such as smoking, drinking alcohol in excess, and using recreational drugs or abusing prescription drugs.

Increasingly, we also recognize that the health of populations is determined by social and economic factors. Adequate family incomes, high-quality educational opportunities, and being socially connected are all key factors that predict the health

Adequate family incomes, high-quality educational opportunities, and being socially connected are all key factors that predict the health of a given person.

Part I . Heal th Po l icy6

of a given person. Social issues such as discrimination, abuse, and social respect all are important determinants of health. To ensure attention to these issues and others like them requires involvement from many sectors of our society as well as political leader- ship to guide collective action to ensure our society encourages pro-health norms and practices. Some people term this a “health in all” approach to social policy.

We have organized this book so that it addresses both types of health issue: the challenge of keeping the population healthy and the challenge of providing eff ective medical care when needed. Th ere are other key defi ning characteristics of the U.S. health care system that guide the organization of this book:

■ Th e importance of organizations in delivering care. Th ese include hospitals, nursing homes, community health centers, physician practices, and public health departments.

■ Th e role of professionals in running our system. Th ese include physicians, nurses, managers, policy advocates, researchers, technicians, and those directing technol- ogy and pharmaceutical businesses.

■ Th e emergence of new medical technology, electronic communications, and new pharmaceuticals. New techniques in imaging, electronic communications, pharmaceuticals, surgical procedures, DNA coding, and stem-cell technology are remarkable but often expensive ways of improving health care.

■ Tension between “the free market” and “governmental control.” Th is tension shapes America’s culture but is sharply present in the health care sector. Relative to citizens of other countries, Americans have more diversity of opinion about whether health care, or certain health care services, are “goods” or “rights.” How one feels about this issue often determines whether a person thinks the delivery of health care should be done by nonprofi t or for-profi t organizations and whether health care should be fi nanced by taxes or private payments.