There are transformative changes occurring in healthcare for which nurses, because of their role, their education, and the respect they have earned, are well positioned to contribute to and lead. To be a major player in shaping these changes, nurses must understand the factors driving the change, the mandates for practice change, and the competencies (knowledge, skills, and attitudes) that will be needed for personal and systemwide success. This article discusses the driving factors leading to healthcare transformation and the role of the registered nurse (RN) in leading and being a fully contributing member of the interprofessional team as we shift from episodic, provider-based, fee-for-service care to team-based, patient-centered care across the continuum that provides seamless, affordable, and quality care. This new health paradigm requires the nurse to be a full partner in relentless efforts to achieve the triple aim of an improved patient experience of care (including quality and satisfaction), improved outcomes or health of populations, and a reduction in the per capita cost of healthcare.

Driving Forces for Change: Cost and Quality Concerns

Table ​Table11 provides an overview of key factors that have been driving healthcare reform. Unsustainable growth in healthcare costs without accompanying excellence in quality and health outcomes for the U.S. population has been escalating to the point at which federal and state budgets, employers, and patients are unwilling or unable to afford the bill (Harris, 2014). The United States spends more on healthcare than any other nation. In fact, it spends approximately 2.5 times more than the average of other high-income countries. Per capita health spending in the United States was 42% higher than Norway, the next highest per capita spender. In 2014, U.S. health care reached $3.0 trillion, or $9,523 per person (Centers for Medicare & Medicaid Services [CMS], 2014). This is almost 20% of the gross domestic product (GDP), meaning that for every $5 spent in the federal budget, about $1 will go to healthcare. The largest expenditures are for hospital care (about 32%), physician and clinical services (26%), and prescription drugs (10%) (CMS, 2015). Health Care System Transformation for Nursing and Health Leaders Essay. With the demographic shifts in the aging population and those with chronic illness, it is anticipated that in three short years, healthcare spending will reach $4.3 trillion (George & Shocksnider, 2014, p. 79; Hudson, Comer, & Whichello, 2014, p. 201).

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The high cost of care is, in part, driven by the greater use of sophisticated medical technology, greater consumption of prescription drugs, and higher healthcare prices charged for these procedures and medications (The Commonwealth Fund, 2015). Also contributing to high cost is waste. It is estimated that 30 cents of every dollar spent on medical care in United States is wasted, amounting to $750 billion annually. Components of waste include inefficient delivery of care, excessive administrative costs, unnecessary services, inflated prices, prevention failures, and fraud (Berwick & HackBerth, 2012; Mercola, 2016).

Not only are the prices for procedures significantly higher in the United States but also the charges for similar procedures vary dramatically, even within the same geographic locale. Reporting on the variability in healthcare charges for similar procedures, The Washington Post (Kliff & Keating, 2013) conveyed the federal government’s release of the prices that hospitals charge for the 100 most common inpatient procedures (CMS, 2013). The numbers revealed large, seemingly random variation in the costs of services. For joint replacements, the most common inpatient surgery for Medicare patients, prices ranged from a low of $5,304 in Ada, OK, to $223,373 in Monterey Park, CA. Health Care System Transformation for Nursing and Health Leaders Essay. The average charge across the 427,207 Medicare patients’ joint replacements was $52,063. Looking at cost variation in a smaller geographic area, the Blue Cross Blue Shield (2015) study of cost variations for knee and hip replacement surgical procedures in the United States found similar cost variability. In the Dallas market, a knee replacement could cost between $16,772 and $61,585 (267% cost variation) depending on the hospital (Blue Cross Blue Shield, 2015).

Perhaps, if this outrageous price tag bought value, we as a nation would accept the expense. After all, healthcare is more vital than most other goods or services. However, the stark reality is that despite outspending all other comparable high-income nations, our system ranks last or near last on measures of health, quality, access, and cost. The United States has higher infant mortality rates, higher mortality rates for deaths amenable to healthcare (mortality that results from medical conditions for which there are recognized healthcare interventions that would be expected to prevent death), higher lower extremity amputations due to diabetes, higher rates of medical, medication, and laboratory errors, and higher disease burden, as measured by “disability-adjusted life-years,” than comparable countries (Peterson-Kaiser Health Tracker System, 2015).

Examining quality within the system, we know that our healthcare system is fragmented with recurring communication failure and unacceptable levels of error. The system is difficult to navigate, especially when patients and caregivers are asked to seek care across multiple providers and settings for which there is little to no coordination. There are significant barriers to accessing care, and this problem is disproportionately true for racial and ethnic minorities and those with low-socioeconomic status (Agency for Healthcare Research and Quality [AHRQ], 2011). With a focus almost exclusively on acute care, the primary care system in the United States is in disarray or, for some, nonexistent despite research data that associate access to primary care with lower mortality rates and lower overall healthcare costs (Bates, 2010). It is not surprising therefore that when discharged from the hospital, an average of one in five Medicare patients (20%) was readmitted to the hospital within 30 days after discharge in 2009 and 34% were readmitted within 90 days. Moreover, 25% of Medicare patients discharged to long-term care facilities were readmitted to the hospital within 30 days, clearly representing gaps in care coordination (Enderlin et al., 2013, p. 48).

The absence or underuse of peer accountability, underdeveloped quality improvement infrastructures, lack of accountability for making quality happen, inconsistent use of guidelines and provider decision-support tools, and lack of clinical information systems that have the capacity to collect and use digital data to improve care all contribute to quality care issues (Shih et al., 2008). Health Care System Transformation for Nursing and Health Leaders Essay. Another impediment to quality is the hierarchical structure of most healthcare organizations that “inhibits communication, stifles full participation, and undermines teamwork” (Leape, 2014, p. 1570). Failure of these organizations to adopt and enforce “no tolerance” policies for behaviors that are known to impact quality (i.e., disrespectful, noncollaborative care among team members that impedes safety to ask questions and express ideas; failure to comply with basic care approaches such as hand washing hygiene and time-out protocols that are known to decrease safety risk) perpetuates the dysfunctional culture in healthcare where negative behaviors block progress toward quality (Leape, 2014).

Driving Factors for Change: Changing Demographics

Changing social and disease-type demographics of our citizens is also fueling the mandate for change. The demographer James Johnson coined the phenomenon “the browning of America” to illustrate that people of color now account for most of the population growth in this country. People of color face enduring and long-standing disparities in health status including access to health coverage that contributes to poorer health access and outcomes and unnecessary cost. The AHRQ in its annual National Healthcare Quality and Disparities Report has provided evidence that racial and ethnic minorities and poor people face more barriers to care and receive poorer quality of care when accessed. These facts underscore the imperative for change in our system.

The graying of America is another changing social demographic, with significant healthcare implications. Beginning January 1, 2011, the oldest members of the Baby Boom generation turned 65. In fact, each day since that day, today, and for every day for the next 19 years, 10,000 Baby Boomers will reach the age of 65 years (Pew Research Center, 2010). Currently, just 14.1% of the U.S. population (44.7 million) is older than 65 years. By 2060, this figure will be 98 million or about twice their current number (Administration on Aging, n.d.). This shift will have significant economic consequences on Social Security and Medicare.

Overlapping with the changing social demographics is the change in disease-type demographics due to the fact that there is a rise in chronic disease among Americans and significantly so among older Americans. Chronic disease (heart disease, stroke, cancer, Type 2 diabetes, obesity, and arthritis) is the leading cause of death and disability for our citizens, affecting an estimated 133 million people. Thought of by some as the single biggest force threatening U.S. workforce productivity, as well as healthcare affordability and quality of life, chronic diseases are among the most “common, costly, and preventable of all health problems” (Centers for Disease Control and Prevention [CDC], n.d.-b). Those with chronic conditions utilize the greater number of healthcare resources, accounting for 81% of hospital admissions, 91% of prescriptions filled, 76% of all physician visits, and more than 75% of home visits (Partnership to Fight Chronic Disease, n.d.). Not surprisingly, older people are more likely to have more comorbidities. Eighty-five percent of adults aged 65 years have at least one chronic disease, 62% have two or more chronic diseases, and 23% have five or more chronic conditions, and these 23% account for two thirds of all Medicare spending (Volland, 2014). Health Care System Transformation for Nursing and Health Leaders Essay.

The situation becomes even more serious when the person also has a disability or activity limitation. Our episodic healthcare model is not meeting the needs of people with chronic conditions and often leads to poor outcomes (Anderson, 2010). More than a quarter of people with chronic conditions have limitations when it comes to activities of daily living such as dressing and bathing or are restricted in their ability to work or attend school. The number of people with arthritis is expected to increase to 67 million by 2030 and of these 25 million will have arthritis-attributable activity limitations (CDC, n.d.-a). These numbers are conservative, as they do not incorporate the current obesity trends that are likely to add to future cases of osteoarthritis. A significant challenge, both now and for the future, is how to care for and pay for the care—medical treatment and other supportive services—that people with chronic conditions need.

Voluntary Change Is Not Enough

As a nation, we have taken incremental steps toward achieving better quality and lower costs for decades. With the turn of the century and the Institute of Medicine (IOM) reports, To Err Is Human: Building a Safer Health Care System and Crossing the Quality Chasm, we became increasingly aware that the level of unintended harm in medicine was too high and that there was a compelling need to scrupulously examine and transform systems to make healthcare safer and more reliable. The recommendations in Crossing the Quality Chasm (IOM, 2001) called for adopting a shared vision of six specific aims for improvement that must be the core for healthcare (see Table ​Table2).2). Although, in principle, there was agreement that these six aims were critical for an improved and effective system and should be evident across all settings, the reality is that widespread change did not occur. As suggested in the report, there was an immense divide between what we knew should be provided and what actually was provided. This divide was not a gap but a chasm, and it was believed that the healthcare system as it existed was fundamentally unable to achieve real improvement without a major system overhaul.

Enter Healthcare Reform

Continued skyrocketing of healthcare costs, less than impressive heath status of the American people, safety and quality issues within the healthcare system, growing concerns that cost and quality issues would intensify with changing demographics, and the reality that there were 50 million Americans uninsured and 40 million underinsured in the United States ushered in the Patient Protection and Affordable Care Act of 2010 (Salmond, 2015). The Affordable Care Act (ACA) is more than insurance reform and greater access for the newly insured but includes programs now led by the CMS aiming to improve quality and control costs—what is being termed value. Value is in essence a ratio, with quality and outcomes in the numerator and cost in the denominator (Wehrwein, 2015).

Improving value means “avoiding costly mistakes and readmissions, keeping patients healthy, rewarding quality instead of quantity, and creating the health information technology infrastructure that enables new payment and delivery models to work” (Burwell, 2015). Through the ACA and the power vested in the CMS to implement value, we are shifting to new principles underlying reimbursement and new models for care and payment (see Table ​Table3).3). For a while, healthcare, like a seesaw, will balance in a precarious state of transition from the old to the new (Cipriano, 2014); however, no one is expecting a return to the old approaches of payment and care. In fact, it is expected by 2018 that 50 cents of every Medicare dollar will be linked to an identified quality outcome or value (Burwell, 2015). And as the nation’s largest insurer, Medicare leads the way in steering new programs and setting the precedent for other private insurers.

As illustrated in Table ​Table4,4, these new models are shifting the paradigm of care from a disease model of treating episodic illness, without attention to quality outcomes, to a focus on health and systems that reward providers for quality outcomes and intervening to prevent illness and disease progression—in keeping populations well. Quality will be defined in terms of measurable outcomes and patient experience at the individual and population levels, and payments (penalties and incentives) will be calculated on the basis of the outcomes. Health Care System Transformation for Nursing and Health Leaders Essay. Efficiency will be maximized by reducing waste, avoiding duplicative care, and appropriately using specialists. Outcomes will be tracked over longer periods of time—making care integration and care across the continuum a mandate. Institutions and providers will be incentivized for keeping people well so as not to need acute hospital or emergency department (ED) service, for meeting care and prevention criteria, and for ensuring the perceived value of the healthcare experience or patient satisfaction is high. This forces a shift from a provider-centric healthcare system where the provider knows best to a delivery system that is patient-centric and respectfully engages the patient in developing self-management and behavioral change capacity. Funds have been made available through the ACA via the CMS to help providers invest in electronic medical records and other analytics needed to track outcomes and to provide support in developing the skills and tools needed to improve care delivery and transition to alternative payment models (McIntyre, 2013).

We have been experiencing the first wave of changes toward value-based care for years. In 2002 (and updated in 2006), the National Quality Forum (NQF) developed a list of seriously reportable events in healthcare (such as surgery on the wrong body part or a mismatched blood transfusion) that became known as “never events.” These never events were considered to be serious and costly healthcare errors that should never happen and are largely preventable through safety procedures and/or the use of evidence-based guidelines. Quality improvement measures were instituted to reduce “never events” to zero. It required establishing a culture of safety such that incidents could be safely reported and performing root–cause analyses when “never” events occurred (Lembitz & Clarke, 2009).

In October 2008, the CMS began denying payment for hospitals’ extra costs to treat complications that resulted from certain hospital-acquired conditions (HACs). Some of the conditions from these two lists shared similarities (surgery on the wrong patient or wrong body part, death/disability from incompatible blood, Stage 3 or 4 pressure ulcers after admission, and death/disability associated with a fall within the facility). These events represent rare, serious conditions that should not occur. However, other conditions included on Medicare’s “no pay” list of HACs were selected because they were high cost or high volume (or both) and assumed preventable through use of evidence-based guidelines. Some of these HACs occur more commonly and have a comparatively greater impact on cost. These “no pay” adverse events identified by the CMS but not by the NQF included deep vein thrombosis and pulmonary embolism in total knee and hip replacement and surgical site infection following orthopaedic surgery. Health Care System Transformation for Nursing and Health Leaders Essay. This CMS policy was directed to accelerate improvement of patient safety by implementation of standardized protocols to prevent the event. These newly defined “never events” limit the ability of the hospitals to bill Medicare for adverse events and complications (Lembitz & Clarke, 2009). Emerging from quality improvement initiatives to prevent “never events” was the concept of “always events” or behavior that should be consistently implemented to maximize patient safety and improve outcomes. Examples of “always events” include “patient identification by more than one source, mandatory “read backs” of verbal orders for high-alert medications, surgical time-out and making critical information available at handoffs or transitions in care” (Lembitz & Clarke, 2009, p. 31).

Today, we have the Hospital Acquired Condition Reduction Program, implemented prior to the ACA but formalized under this Act to broaden its definition of unacceptable conditions. It uses financial penalties for high quartile scores in rates of adverse HACs. These conditions, considered to be reasonably preventable conditions that were not present upon admission to the hospital (see Table ​Table3),3), must be monitored and reported. Lowering these rates has occurred with careful monitoring and surveillance for events, implementation of evidence-based best practices, creating checklists to ensure processes are followed, and transferring patients out of EDs and critical care units as soon as possible.

Bundled payments, a model reimbursing two or more providers for a discrete episode of care over a specific period of time, are being used in orthopaedics for some spine and total hip and knee arthroplasty surgical procedures. A fully bundled payment system extends beyond the institution, as it includes the surgeons and all other providers involved in the care of the patient during and after surgery. In this bundled model, lump sum payments are given to the institution to cover the episode of care from the preservice or presurgery period, through the procedure itself, and to a postservice period, generally anywhere from 30 to 90 days after surgery. This eliminates fee-for-service where one payment is made to the hospital, a second payment to the surgeon, and other payments to the anesthetist, the physical therapist, homecare, etc. The bundled payment is a prenegotiated type of risk contract in which providers will not be compensated for any costs that exceed the bundled payment. In addition to breaking down the current payment silos, bundles set quality standards to further the IOM aims of healthcare that eliminates duplication and waste, increases efficiency, uses evidence-based protocols to maximize outcomes, and engages the patient in building capacity for self-care (Enquist et al., 2011; McIntyre, 2013). Health Care System Transformation for Nursing and Health Leaders Essay.

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The Comprehensive Care for Joint Replacement model is a bundled approach targeting higher quality and more efficient care for Medicare’s most common inpatient surgical procedures—hip and knee replacements. Institutions under this model have reengineered patient care processes and standards developing standardized clinical pathways to enhance reliability or consistency in care. Processes identified as important include comprehensive patient teaching spanning from the preadmission phase to the postdischarge recovery phase, standardized order sets, early mobilization, redesign of services for colocation for patient rather than provider ease, use of nurse practitioners to champion the pathway and ensure compliance, and implementing efforts to move patients from the hospital to home with home healthcare as opposed to hospital to inpatient rehabilitation to home with home healthcare (Enquist et al., 2011; Marcus-Aiyeku, DeBari, & Salmond, 2015). Practicing in a bundled model requires that organizations examine the distribution of costs across the service or episode, identify, understand, and eliminate variation, map evidence-based pathways of care, coordinate care with providers across the continuum, and use ongoing evaluation and analytics to identify where care can be managed more efficiently and effectively (American Hospital Association, n.d.).

Moving forward, we will see greater attention to addressing preventive and chronic care needs across an entire population. The emphasis will be on interventions that prevent acute illness and delay disease progression and will require a true interprofessional team model to accomplish. Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes are expected to improve primary care and care across the continuum by incentivizing providers to be accountable for improving patient and population health outcomes through cost-sharing approaches to reimbursement. It is more than the traditional health visit and will require a focus on both the individual and the population to advance health. Primary healthcare under the ACA stresses prevention, health promotion, continuous comprehensive care, team approaches, collaboration, and community participation (Gottlieb, 2009, p. 243).

If ACOs are to achieve their goals to improve the health of populations and realize a positive profit margin, they will need to adopt new ways of thinking about health. There is growing awareness that overall health outcomes are influenced by an array of factors beyond clinical care. Figure ​Figure11 illustrates the County Health Rankings model of population health. As can be seen, health outcomes defined as length and quality of life are determined by factors in the physical environment, social and economic factors, clinical care, and health behaviors. The model recognizes that “health is as much the product of the social and physical environments people occupy as it is of their biology and behavior” (Kaplan, Spittel, & David, 2015, p. iv). Using this framework, it is easy to recognize the critical need to incorporate behavioral factors and social context when trying to improve well-being and health outcomes. Individual behavioral determinants include addressing issues related to diet, physical activity, alcohol, cigarette, and other drug use, and sexual activity, all of which contribute to the rates of chronic disease. The social and physical contexts (together comprising what is called social determinants of health) of where a person lives and works influence half of the variability in overall health outcomes, yet rarely are considered when one thinks of healthcare. Table ​Table55 presents social and physical determinants as defined by Healthy People 2020. If we are to achieve true population health, it will be essential to have models in which clinical care is joined with a broad array of services supporting behavioral change and is integrated or coordinated with other community and public health efforts to address the social context in which people live and work. With these new reimbursement models, healthcare organizations and providers will be incentivized to identify the other 80% of factors (health behaviors, social and economic factors, and physical environment factors) and address them to improve patient outcomes and generate savings. Health Care System Transformation for Nursing and Health Leaders Essay.