Stronger Together Nomi Health + Artemis Health hero image
April 26, 2022

Healthcare State of the Union: Challenges and Trends in U.S. Healthcare

Artemis Health

While the U.S. healthcare system is among the most advanced in the world, that has not translated into optimal health for the U.S. population. Now the COVID-19 pandemic has put the system under even greater strain and caused huge healthcare disruptions. However, the pandemic has also accelerated trends that might be for the long-term benefit of the healthcare industry.

So what is the current healthcare state of the union? What are some of the greatest challenges and trends impacting the U.S. healthcare industry and self-insured employers? We sat down with Sanjay Motwani, President of Artemis Health, for some insights.

Impact of Climate Change on Human Health

At the top of Sanjay’s list of U.S. healthcare challenges was an item that might be unexpected – climate change. “The impact of climate change on human health was the top surprise for me as a market trend in healthcare,” says Sanjay. This impact is being felt in several ways.

First, there are the weather-related disasters that result from climate change. Amongst the examples, Sanjay points to the 2017 California wildfires. That disaster displaced thousands of employees, and more of these events will cause greater healthcare disruptions in the future..

Beyond these individual disasters, Sanjay points to other broad-based effects. “We may have water supply shortages that will affect child nutrition – here in the U.S., not just in the developing world. We may see more cardiovascular diseases due to higher pollution and extreme heat. Severe weather can also impact mental health.”

Climate change also impacts healthcare equity, Sanjay points out. “This is because certain disadvantaged areas and communities are more vulnerable to climate-related risks.”

Americans Paying Higher Costs for Lower Quality Healthcare

Another nationwide challenge is the exorbitant cost of U.S. healthcare. “We have continued to pay a high cost for healthcare in the U.S., compared to the quality of care we receive,” says Motwani. “We pay almost 18% of our GDP toward healthcare, while most developed countries pay 8-10% of GDP, with developing countries paying 2-3%.”

Sanjay says this high healthcare spend in the U.S. becomes even more problematic due to two factors – an aging population and high healthcare inflation. “Our aging population will consume more healthcare resources in the next 10, 20, 30 years. And the inflation of healthcare is far higher than normal inflation. Historically, our healthcare inflation rate has been double the overall rate.”

Sanjay sees 20% of GDP as a tipping point for our national healthcare spend. “Once we pass that 20% mark, it will be very hard for us to pull back. We need to at least keep it in the 17-18% range.”

As for the quality of U.S. healthcare, this is a personal issue for Sanjay. “I grew up in a developing country, so I was aware of things like life expectancy, child mortality rates, and premature death rates. If you look at America now, we aren’t doing great on those metrics. When we look at these numbers, despite spending more, we don’t have better healthcare outcomes. We have a higher disease burden for a developed country.”

“The big takeaway,” Sanjay sums up, “is that we have a lot more work to do in order to fix these problems of cost and quality.”

A Double Disruption in the Healthcare Industry

Sanjay believes that we are currently experiencing a “double disruption” in the healthcare industry. The first disruption has been the widely-known framework of the Triple Aim of Healthcare. This framework has three aims for the U.S. healthcare industry: (1) improving the patient experience, (2) improving the health of populations, and (3) reducing the per capita cost of healthcare. This trend accelerated with the Affordable Care Act and has now expanded to new payment models in commercial insurance. 

The last two years of the COVID-19 pandemic have accelerated the second disruption through three main prongs: (1) digital health, (2) consumer choice, and (3) health equity.

Digital Health on the Rise

“We saw massive uptake of virtual care and telehealth in the first days of the pandemic,” Sanjay notes. Indeed, healthcare consumers are still accessing telehealth as the pandemic continues, and employers are investing in digital health programs for the future. This trend has disrupted payment models in several ways. 

As an example, Sanjay points to employers signing contracts with digital care specialty providers. “Those providers will then do both triaging and specialty care for those employers’ patient populations, using a digital care model. Since the normal process is so burdensome - think of all the time and cost involved in an employee needing to go to a PCP, get a referral to a specialist, and so on – this ends up reducing the total cost of care.”

Another example is providers being forced to improve their services. “If you walk into a hospital or medical group today,” says Sanjay, “they are having to optimize their processes. This is because ease of access and convenience have become increasingly important to patients.”

“Digital health is not a simple effect confined to the pandemic era,” Sanjay predicts. “It will outlast the pandemic and disrupt American healthcare in ways we haven’t imagined.”

Consumer Choice with the Aid of Price Transparency

Consumer choice for healthcare services is now coming to the forefront, with the aid of price transparency. Recent legislation requires both providers and payers – which essentially means plan sponsors – to publish their prices. This gives greater choice to healthcare consumers.

“Most people spend more time comparing and evaluating options for a $20 purchase on Amazon than they do with their healthcare,” says Sanjay. “So with this newfound price transparency, we have to help consumers make better choices.”

Health Equity and the Effects of the Pandemic

The pandemic has affected health equity by disproportionately impacting less-advantaged communities. Sanjay points to the uncertainty of federal funding for the uninsured for COVID-19 vaccinations and related services. “That is so disruptive to certain sections of our population, especially those at or below the poverty line.”

Health equity concerns are now being taken into account for employers seeking to provide healthcare access for their employees. “Employers have started to view this as trying to increase healthcare access,” says Motwani. “They want to increase people’s ability to obtain education, good nutrition, fertility care, and so on.”

All three of these prongs - digital health, consumer choice, and health equity - are important factors for self-insured employers. “All three are taking center stage in the decision making surrounding healthcare in employer boardrooms and state governments,” says Sanjay. “Accordingly, I think we will see disruptive healthcare models emerging in this decade.”

Self-insured employers can track and make informed decisions about healthcare trends with Artemis Health. Watch our 2-minute demo video to learn more.   

Share to:

Learn how Artemis Health can simplify your path to a better benefits program.

Request DemoWatch Demo

Learn how Artemis Health can simplify your path to a better benefits program.

Watch Demo