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National Academy of Medicine; The Learning Health System Series; Hunt A, Anise A, Chua PS, et al., editors. Valuing America’s Health: Aligning Financing to Reward Better Health and Well-Being. Washington (DC): National Academies Press (US); 2024 Feb 12.
Valuing America’s Health: Aligning Financing to Reward Better Health and Well-Being.
Show detailsBridging the gap between the inefficient, ineffective, and inequitable realities of the current U.S. health system and the strategies needed to achieve better health and well-being requires a bold, disruptive, yet realistic vision for a transformed health system. This vision must be grounded in the principles of person-centricity, cross-sector collaboration (as described in Chapters 3 and 4), and equity.
With these principles at the center, the vision can inspire financial strategies that will sustainably resource, incentivize, and deliver health system transformation. For this vision to come to fruition, every stakeholder invested in ensuring better health has the responsibility to enact short-term repairs, mid-term renovations, and long-term redesigns in multiple sectors across the health system for decades to come. The key pillars of this vision, as conceived by the Steering Group, are presented in Box 2 and described in the text that follows.
- 1.
U.S. health status is at least that of other middle- and high-income countries, with inequities eliminated.
While the United States spends the most on health care compared to other Organisation for Economic Co-operation and Development (OECD) countries and ranks high for scientific and clinical innovation as well as survival rates for some cancers, it has the lowest life expectancy, highest chronic disease incidence, and the poorest health outcomes (Peter G. Peterson Foundation, 2022; Tikkanen and Abrams, 2020). This contradiction indicates that our nation does not provide an equivalent level of equitable, efficient, or effective conditions to promote whole person, whole population health as its peer nations. The first step toward realizing the Steering Group’s vision is to ensure U.S. health status is at least that of or exceeds other OECD countries through the pillars, goals, and actions suggested throughout this Special Publication.
This process will primarily include rallying a whole-of-society approach, including but not limited to health care and public health systems, to target the drivers of the rapid, inequitable, and sustained decrease in U.S. life expectancy. In many instances, poor health in America has been driven by growing and intersecting inequities in care and outcomes, driven by racial, ethnic, socioeconomic, disability, and geographic factors, over time (IOM, 2003).
The high prevalence of morbidity and mortality discussed in Chapter 1 reflects the impact of inequities in the drivers of health as well as the structural racism that established and continues to enable these injustices. Structural racism is a fundamental driver of health disparities in the United States, with a system that reinforces and restricts opportunities for long, healthy lives of Black Americans and other people of color. This discrimination and injustice manifests and intersects with the drivers of health: quality housing and neighborhoods, access to economic opportunities, quality education, and health care (Churchwell et al., 2020). Thus, America must not only reckon with—and reform systems and structures to improve—overall population health, but also structural racism in order to improve the nation’s health. This transformation will require considerable effort in domains upstream or adjacent to health care and public health systems, including housing, food, transportation, education, employment, and public safety (Churchwell et al., 2020).
Tackling structural racism must also work hand in hand with the key structural economic issue of wealth inequality and poverty. In the United States, only 2 percent of household wealth is held by the bottom 50 percent of households. This disparity is exacerbated by systemic and structural racism, resulting in the average American Black family having eight times less wealth than the average American White family. On a broader population level, 36 percent of all Americans have no savings at all, and another 19 percent have less than $1,000 saved (Bieber, 2023). The consequences of this lack of wealth are manifested on a developmental level, with less wealthy individuals at greater risk for exposure to damaging air pollution (as a result of residential segregation or low quality of housing), lower educational attainment and achievement, violence and homicide, risk of developing and dying from a chronic disease, and, ultimately, lower life expectancy (Avanceña et al., 2021). This higher mortality occurs due to a constellation of risk factors that comes from the psychosocial anxiety and stress of inequality: People with low incomes are more likely to smoke, consume an unhealthy diet due to poverty and food insecurity, experience unemployment and job security, and are two times as likely to die from sudden health incidents (Avanceña et al., 2021).
To realize the Steering Group’s vision of whole person, whole population health, there must be a bottom-up, community-led movement that involves aligning the forces of institutions that reinforce racial discrimination, perpetuate wealth inequality and poverty, and drive adverse health outcomes from the prenatal or developmental stage throughout the entire life course (Bailey et al., 2017). These institutions include, but are not limited to, education, banking, media, criminal justice, and health care.
A transformed health system that achieves whole person and whole population health and well-being can only exist when every person has the opportunity, resources, and support to achieve their best health, with particular attention and actions targeted to those most in need. To advance health equity, we must expand our collective notion of the sources and drivers of health, as well as design systems and make efforts to address health and health-related social needs at their inception. It is only by taking intentional and systemic action that we can radically, and uniformly, improve America’s health.
- 2.
Health and health equity are nationwide commitments spanning beyond organizations in health care and public health.
For many years, it has been broadly accepted that health care is responsible for contributing only a minority of what it takes to produce overall health, while social and economic factors, income, genetic predisposition, and personal lifestyle choices are much more influential (Braveman and Gottlieb, 2014). Despite this understanding, the health care sector is still prioritized as the source of accountability and leadership for health outcomes, regardless of the suitability of state, local, tribal, and territorial health departments to serve as backbone organizations for cross-sector partnerships to address the social determinants of health. Therefore, the resources and infrastructure necessary for public health departments to succeed are often absent, severely limiting the ability of public health entities to coordinate public health responses and facilitate broad multi-stakeholder collaboration that could help decentralize governance of and accountability for health (Galea and Maani, 2020).
The disconnect between underinvesting in public health and over-allocating resources to the health care sector reflects a lack of policy coherence in the nation; financing is not distributed so that health care, public health, and other health promoting sectors such as housing, social services, and food interact and synergize to promote population health and health equity. The first priority of realizing the goal of whole person, whole population health should be to implement the principle of “health in every policy” and apply this principle consistently. An example of this change would be a national health infrastructure that integrates stronger public health systems. Adequately funding public health would build the capability to collect, analyze, and apply data, reduce inequities in health care and public health system capacity, and strengthen the role of individuals, families, and communities as leaders in promoting whole person, whole population health. The system would then be able to effectively prevent disease and promote health, detect emerging health crises, and maintain the ability to respond to noncommunicable and infectious disease threats.
Another disconnect is the de-emphasized priority of health in economic decision-making. Business and economic decisions are often incentivized by financial priorities measured through growth and profit-driven metrics such as, but not limited to, revenue growth, total shareholder returns, or return on equity (Bradley et al., 2022). The consequence of these incentives is a mindset highlighted in several examples below, that has negatively impacted the nation’s health by ignoring potential harm in favor of financial gain:
- A company deciding to market and sell unhealthy food and beverages to children (e.g., large portion sizes, products with high levels of sugar and sodium) adversely affecting their diets across the life course;
- Land developers and zoning boards deciding to exclude walkable and outdoor spaces in urban areas because they could reduce profits;
- A local government administrator deprioritizing lowering barriers to constructing affordable housing;
- A policy maker voting to restrict access to preventive care for low-income families; or
- Hospital system leadership deciding to construct an additional facility rather than invest in upstream interventions that would disrupt existing structural barriers and improve the baseline health of patients.
Furthermore, existing policy interventions that promote health in economic decisions are often unevenly applied. While building a new road or structure typically requires a corporation to submit an environmental impact assessment, similar discussions or assessments on health impact are infrequent and nonstandard. Changing this disconnect to promote the careful consideration of health impact in a similar manner to how potential environmental impact is currently considered would ensure more responsibility for the tremendous power that business decisions have on communities, families, and futures across our nation.
This change must begin through cross-sector cooperation and collaboration, which could be accomplished if policy makers adopt whole person, whole population health as the primary framework on which the United States will develop into the future. This framework could be applied through funding and accountability actions such as, but not limited to, legislating new policies and programs at the federal and state levels; creating and enforcing health, environmental, and financial sector regulations within government agencies; and devising incentives that encourage capital allocation that contribute a net social positive to whole person, whole population health throughout the nation.
Several recent programs, policies, and legislation would fit such a framework. These include the 2022 Inflation Reduction Act, which enabled the government to negotiate for lower prescription prices for Medicaid and incentivized renewable energy and electric vehicles (Cabral and Sherman, 2022). Other examples include the Safer Communities Act, which appropriated $250 million for states to expand community mental health services and an additional $240 million over 4 years for mental health awareness among school-aged youth, including training for school personnel and other adults. At the state level, policies that could improve health outcomes include increasing the minimum wage, which has been linked with a decrease in infant mortality and low weight births and has significant health dividends across the life course (Avanceña et al., 2021). Other solutions that tackle structural drivers of poor health across the life course include reducing barriers to access for the Supplemental Nutrition Assistance Program and expanding Medicaid benefits under the Affordable Care Act (Carlson and Llobrera, 2022; Leigh and Du, 2018; NIMHD, 2022). Finally, expanding programs such as the Earned Income Tax credit but also focusing on other strategies that promote employment and increase parental income could help dismember some aspects of structural racism by promoting intervention at the household level (Gitterman et al., 2016).
Additionally, current Securities and Exchange Commission efforts to enhance the transparency of Environmental, Social, and Governance (ESG) screening methodologies for finance and investment products will promote additional capital flows into companies that contribute to the social good, although they took 30 years to put into place (U.S. Securities and Exchange Commission, 2022). Finally, the expanded Child Tax Credit, despite ending after its 1-year authorization from the 2021 American Rescue Plan Act ended, lifted 3.7 million children out of poverty and provided improved nutrition, decreased reliance on credit cards, and enhanced access to education (Hamilton et al., 2022). These policies highlight that, if consistent and sustained legislation, investments, and regulations with health as the priority are applied, it would radically transform the nation’s health toward the Steering Group’s vision of whole person, whole population health.
- 3.
Health care expenditures as a percentage of the GDP do not constrain and displace other important social services that directly impact health and equity.
The current proportion of the GDP spent on health expenditures is unsustainable. In 2020, health care expenditures accounted for 19.7 percent of the U.S. GDP (CMS, 2020). This figure has more than tripled since 1960, with health care expenditure increases outpacing the growth rates of GDP, inflation, and population across the same period (Nunn and Shambaugh, 2020).
While the status of the United States as a wealthy nation with an aging population accounts for some of this growth, the pace and nature indicate a highly unsustainable fiscal situation relative to undesirable health care costs and health outcomes (Peter G. Peterson Foundation, 2022). At the federal and state levels, rising health expenditures combined with worsening health outcomes reflect wasteful government spending that, with needed adjustments and alterations, could be lessened with vastly improved outcomes.
U.S. health care expenditures grew from $2.6 trillion in 2010 to $3.65 trillion in 2018 (Antos and Capretta, 2020). Over roughly the same period (2008-2018), public health spending experienced no statistically significant growth (with the exception of spending on injury prevention), hovering around $93 billion annually (Alfonso et al., 2021). This substantial gap indicates misplaced priorities that emphasize a reactive sick-care approach to health instead of a system that espouses the preventive and health-promoting aspects of whole person, whole population health. By underinvesting in policies and programs that improve the overall health and well-being of populations and instead allocating funding to sick care, the interventions that could target drivers of structural inequality, poverty, and racism are neglected. Shifting investments toward public health interventions, programs, and policies as well as targeting high-impact areas, such as the social drivers of health and structural racism, could rapidly improve overall health and well-being (Kindig, 2022). Efforts could include employment opportunities focused on reducing structural inequality, including reducing discrimination in the workplace, increasing accessibility to nutritious and less calorie-dense diets, and instituting policies to expand housing access that also dismantle segregation across economic and racial lines, among many others (Churchwell et al., 2020). These investments would ultimately reduce the need and, therefore, the cost of sick care.
Rising health care costs will continue to impact American employers and households unless health system transformation as outlined in this Special Publication occurs. Despite growing insurance coverage and out-of-pocket cost reductions provided by the Affordable Care Act, the share of household spending attributed to health care in the United States increased from 5.9 percent in 2004 to 8.1 percent in 2018 (Chalise, 2020). Out-of-pocket payments for medical services, drugs, and supplies accounted for roughly one-third of household health care expenditures in 2018 and health insurance (which largely reflects the underlying cost of medical care due to medical loss ratios capping administrative costs and profit) consumed the remaining two-thirds, indicating that medical (i.e., sick-care) costs directly and indirectly drive households’ increasing health care spending (Chalise, 2018). Since 2011, health insurance premiums and deductibles have climbed substantially, with average monthly premiums increasing from $217 in 2011 to $515 in 2019 (reflecting 11.6 percent growth per year). The average deductible for an average plan offered on Healthcare.gov has also increased, from $2,425 in 2011 to $4,500 in 2020 (Antos and Capretta, 2020). If health care cost increases had aligned with the growth in the Consumer Price Index, an average American family would save approximately $553 per month, yielding roughly $6,636 annually to spend on other needs and priorities (BLS, 2022).
The solution to rising health care costs is complex and difficult to solve. There are substantial incentives and underlying market power of health care system actors to set elevated health care prices (NASI, 2015). At nearly one-fifth of the U.S. economy, health care actors and their investors often pursue commercial interests, such as increasing rates, resisting participation in value-based care models, and streamlining operations to produce favorable quarterly earnings and distributions for shareholders. These rational actions result in the collective dysfunction of the U.S. health and health care system, including sub-optimal care outcomes and high costs (Chua et al., 2022). Furthermore, the political and economic influence of the health care industry combined with the complexity of the U.S. health care system increases the difficulty of devising coherent solutions to transition to value-based care and improve care quality and outcomes (King, 2017; Wang and Anderson, 2022).
While lowering high health care prices by targeting market power and perverse incentives is a worthy goal that may reduce waste and enhance health care quality, this solution would not fully solve the declining health status of all Americans. Instead, the best and most effective way for the United States to spend less on health care and ensure whole person, whole population health is to create the conditions by which people and populations can be healthy, with as little intervention from health care as possible.
- 4.
Economic and cultural incentives encourage every stakeholder sector to take health promoting actions and make health promoting investments.
Fully optimizing health and well-being in the United States also necessitates economic incentives and societal norms that reinforce the vision. To accelerate the transformative progress needed, the Steering Group envisions a future in which policies incentivize health promotion and disincentivize harmful activities and exist alongside widespread social consensus on the importance of whole person and whole population health and well-being.
Drawing again on ongoing work in reducing the impact of climate change, some governments have exceeded commitments made in the Paris Climate Agreement by joining a whole-of-society approach to addressing climate change with laws and policies that disincentivize carbon emissions (Mora, 2013). This combination of public accountability, regulatory factors, and societal pressure has led some entities to take even larger strides toward the end goal, with corporations like Google and Microsoft aiming to be “carbon negative” and powered by renewable energy by 2030.
Achieving a transformed state of health and well-being in the United States will require a combination of societal and economic interventions as part of a broader movement to prioritize a holistic conception of health. The public must be able to expect that employers would prioritize the physical and mental health, social cohesion, and well-being of their employees by creating healthy workplaces and cultures, including the provision of a living wage. Public health departments must be adequately funded to perform their core functions of resource coordination, stakeholder alignment, surveillance and monitoring, needs assessment, disease prevention, and health promotion to meet 21st-century needs. Institutions such as schools must be on the front lines of tackling structural racism, poverty, and inequality and promoting whole person, whole population health at an early stage of life. Schools and other educational institutions could promote health literacy, ensuring access to healthy food, encouraging physical fitness, and protecting students from violence and harmful influences. At all ages, especially from early childhood, providing opportunities for social-emotional learning—a pedagogical method for developing self-awareness, self-control, and interpersonal skills—could form the basis of life-long resilience and success in health. This approach could also improve academic performance, reduce bullying, and lower drop-out rates (Committee for Children, 2022).
Given the benefits of a whole-of-society approach for communities and corporations, individual and collective investments must be made to empower and advance a social infrastructure that will enable the creation of a public health and health care system that promotes and enables whole person, whole population health. Policies should also support and reward health promoting investments through grants, tax breaks, and incentives that share costs between governments, communities, and responsible organizations to promote health. Moving forward, both social and economic considerations and pressures must be aligned to create demand for new and better solutions. Federal and state policy makers should appropriate more impactful health-enhancing investments and enact financial and reputational penalties for actions and practices that harm the public’s health.
- 5.
Efforts from all sectors, including government programs and regulations, are organized to prioritize the health of individuals, communities, and society.
Government programs and funding streams are not currently structured to promote whole health for individuals or populations. The distribution of services among multiple agencies, inconsistencies in policy, and uneven funding leads to silos and inefficiencies in the financing and organization of services and can even serve to worsen individual and community health.
The Steering Group envisions a transformed health system where public and community-based programs and services are designed to maximize individual, family, and community health and well-being. This transformation must also help ensure that those who have been historically marginalized can efficiently and effectively access well-resourced and equitably designed interventions that support whole person, whole population health and well-being, including economic and social support interventions. Aligned with a diverse array of community needs and informed by individual engagement (discussed in the section below), the services most essential for producing health and well-being must be appropriately funded and sustainably incentivized to ensure reliable and equitable service provision for individuals, families, and communities. These interventions would reduce the negative life-long impacts of poverty, material deprivation, and inequality. Based on their long-term and reliable relationship to better health, examples of these services may include investments in state, local, tribal, and territorial public health workforce development, programs, and services; access to affordable housing; expansion of home- and community-based services; investments in preschool and early childhood care and education, as well as K-12 education; strengthened employment assistance; and Supplemental Nutrition Assistance Program (SNAP) assistance.
Under the Steering Group’s vision, programs such as these would be applied on a broader scale to ensure that beneficiaries can access what they need to improve their health efficiently, affordably, and equitably and choose the interventions that would help them the most. These interventions include the ability to access public health insurance or SNAP through a “no-wrong-door” approach or recent efforts in Arkansas, Massachusetts, and Oregon leveraging Medicaid 1115 waivers to develop food-as-medicine initiatives that expanded access to food tailored to individual medical needs, nutrition counseling, and even cooking classes (Held, 2022). The full realization of this aspect of the vision would result in the incorporation of health in every policy, with government at all levels focused on the equitable provision of health across their respective jurisdictions. Grants, funding, and policies across all agencies would be evaluated for their potential to advance a broad conception of health and, wherever possible, redesigned to ensure better health equity and the health of individuals and communities.
- 6.
Individuals and communities are empowered as organization and delivery decision-makers for matters pertaining to their health.
Determining the best way to measure the construct of health as “a state of physical, social, and emotional well-being, not just the absence of disease” remains challenging (WHO, 2022). Two critical elements of importance to individuals and communities are engagement in determining measures of success in health care and recognition as decision-makers related to investments intended to benefit their health.
Current health care measurement models—largely rooted in Donabedian’s model, which analyzes quality via structure, process, and outcomes—overemphasize clinical and process-based outcome measures (Donabedian, 1988). The implication of this framework is the widespread adoption of the accountability approach to creating measures, which emphasizes the measurement, incentivization, and rewarding of a series of functional and clinical processes and outcomes. Our current health care payment system, including the Centers for Medicare & Medicaid Services, has largely endorsed the use of these models to assess health system performance as well as outcomes and, therefore, drive payment (NAM, 2022).
This approach largely neglects core elements of whole person, whole population health, such as patient and family engagement in care delivery and consideration of the long-term health and well-being of individuals and populations served, as opposed to relatively short-term clinical outcomes. For example, at a systems level, the breadth and depth of measurement requirements have led to a suboptimal allocation of resources, prioritizing administrative data and electronic medical record collection activities and requirements over providing services that benefit whole-person, whole-population health and well-being. This system has also led to significant clinician burnout that further harms individuals by limiting opportunities to access care (Shah et al., 2020).
Developing a system that supports whole person, whole population health will require a novel and disruptive redesign in health care payment and financing, fueled by creative, person-centric approaches to measuring success, such as prioritization of patient-identified goals at the point-of-care (e.g., being able to walk their daughter down the aisle in 3 months’ time) and disparity reduction, over some of the more traditional performance measures.
Engagement of individuals and communities should not only be restricted to measurement and payment. The vision of whole person, whole population health also advocates for a disruptive transformation in resource allocation and investments in health that is led by communities and individuals. Under the vision, the Steering Group determined that communities and individuals within localities know best regarding the services that would have the most significant impact on their health. As such, they should be central participants in decision-making processes that purport to invest in their health (Singletary and Chin, 2023).
Both key elements for meaningful engagement—community-driven measures to define success and drive payment, as well as community-driven allocation of resources and investment in health—would represent a radical shift from the status quo. Under a transformed whole health system, communities and individuals would participate in defining, measuring, and investing in the necessary components, services, and programs that would enable them to realize their fullest potential health.
CONCLUSION
What can be learned from other effective social change movements in American history, such as the civil rights movement and climate change? What elements are needed to kick-start and maintain a movement to prioritize the health and well-being of the population? In 2013, the National Academies’ Roundtable on Population Health Improvement sponsored a workshop to explore the lessons gleaned from social movements to accelerate a movement to improve health and promote health equity (IOM, 2014). A key message from that workshop is that “social movements emerge from the efforts of purposeful actors, individuals, or organizations to respond to changes [and] conditions experienced as unjust—to assert new public values, form new relationships, and mobilize political, economic, and cultural power to translate those values into action” (IOM, 2014, p. 10). Social movements must also incorporate goals, leadership, strategy, structure, and effective messaging while allowing for organic relationships and communities of practice that breed transformative influence far greater than the sum of individual contributions (Wheatley and Frieze, 2006). Successful movements also often take advantage of political opportunities to enact change. Additionally, effective health-related movements in the past often had an antagonist—such as “Big Tobacco” during the anti-smoking movement—that helped coalesce and sharpen efforts (Yale University, 2022).
After examining the characteristics of successful social movements of the past, it appears that critical elements may already be in place for the movement to prioritize whole person, whole population health, well-being, and equity to synergize with the nation’s reckoning with structural racism and wealth inequality. The nation and the world are emerging from a devastating era marked by disease and death, as the COVID-19 pandemic has taken more than a million lives with a disproportionate impact on communities of color, people with disabilities, and the socioeconomically disadvantaged (Andrasfay and Goldman, 2021; CDC, 2022). The murder of George Floyd on May 25, 2020, escalated calls for racial and social justice and called attention to the deep disparities that have persisted in the U.S. health system for decades. The pandemic also demonstrated that rapid change is possible by stimulating new norms for vaccine development, information sharing, telecommuting, and virtual health care to meet a moment of crisis.
To ensure the United States reaches the north star—a whole person, whole population health system—the nation must sustain the disruption of current systems with the forcefulness and urgency of the contemporary social movements of the past several decades. The imperative should not be to avert or respond to our health crisis. Instead, we must first repair systemic and structural failures to ensure U.S. health status matches or exceeds that of other OECD nations. Second, every stakeholder, company, and entity must be held accountable and responsible for overall health and health equity in the nation. Third, health care expenditures must be contained, with a more equitable allocation to public health systems given their core mission of health promotion and disease prevention. Fourth, clear economic and cultural incentives are needed to encourage every sector that benefits from improved health to embrace health promoting actions and investments. Fifth, a collaborative financing and policy-making approach, from government regulations, new legislation, and the reconceptualization of economic success, is required to enable change that prioritizes whole person, whole population health. Finally, individuals and communities must be able to use their knowledge, power, and autonomy to direct decisions about health services, processes, and infrastructure that are most meaningful to them.
The next chapter further illustrates the need for disruptive, transformational action through case studies on innovative care models and interventions. Despite the rapid innovation, pilots, and successes of these models, the chapter also illustrates their limited impact relative to the scale and severity of the current national health crisis.
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