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Running head: TWO AMERICAN HEALTH CARE SYSTEMS Comparison and Analysis of Two American Health Care Systems: Phoenix VS Boston Comparison and Analysis of Two American Health Care Systems: Phoenix VS Boston The purpose of this paper is to examine two American health care systems. Examining the differences between cities such as Phoenix and Boston will aid in future development of successful health care systems. Specifically, the issues discussed will be external factors affecting the cities health care, organization of the system, clinical practice and delivery of care, care of the poor, and future issues for each system. External Factors Affecting the Health Care System Population Growth Rapid growth in the Phoenix area during the past three decades distinguishes it from other large metropolitan areas in the United States, and has had quite an impact on its health care delivery system (Christianson, Mechanic, St. Peter & Srinivasan, 1997). The city also faces future challenges as being one of the fastest-growing metropolitan areas in the country, with the expectation for growth to be nearly 3% annually over the next 15 years (Christianson et al., 1997, p. 2). The population of Phoenix as of July 1999 was a little over 3 million (Draper, Brewster, Brown, Watts, Felland, Christianson, Stoddard & Park, 2001). The population for Boston County in July of 1999 was almost 4.5 million (Devers, Christianson, Felland, Felt-Lisk, Ruddell, Brewster, & Tu, 2001, p. 1). The population change between 1990-1999 was just 2.8% compared to the 8.6% in other metropolitan areas (Devers et al., 2001). Income The family income is an important external factor affecting the health care system for both cities. For metropolitan areas above 200,000 in population, the average median income is $27,843 (Devers et al., 2001). The median income for Phoenix is $29,135 (Draper et al., 2001, p.1). The median income for Boston is $31,868, well above the average metropolitan median (Devers et al., 2001, p. 1). Diversity Phoenix has a very diverse population. The city has 13% of its population over the age of 65 (Draper et al., 2001). Hispanics account for 17% of the population, which is considerably above the national average (Christianson et al., 1997). With less of an ethnic make-up, nearly 90% of the Boston area is Caucasian, compared with 75% for the United States as a whole. Boston is similar to Phoenix with 14% of its population over the age of 65 (Devers et al., 2001). Comparison and Analysis In comparison of the population, Boston is larger, but Phoenix is one of the fastest-growing areas in the United States. The median income in Phoenix is slightly less than Boston, but is still above the national median. While Boston is “whiter” and healthier, Phoenix is more diverse in its population make-up. These significant differences mean a struggle for Phoenix. Being more diverse will present a challenge of creating a health care system that meets the needs of the entire population. With less income, Phoenix needs to address the issue of lowering health care costs so that it is affordable to its population. The most difficult test Phoenix will face will be that of maintaining a successful system with the large growth in the area. On the other hand, Boston will have to ensure that the current Health Care system is adequately meeting the needs of its entire population. With less diversity, and a higher median income, Boston legislatures cannot forget that with all statistics there are outliers which are not reflected in the numbers. When the numbers read 90% for a “white” population, the 10% remaining will need to fit within the health care system as well. Boston cannot just create a system made for “white” and wealthy individuals with a slow population growth, or part of the population will be forgotten. Organization of the Health Care System Physician Payment Arrangements In Phoenix, Health Maintenance Organizations (HMO’s) currently enroll almost 30 percent of the total population, and all of the Medicaid population (Christianson et al., 1997). In 1995, Boston reported significantly higher HMO penetration at about 45% (Corrigan et al., 1997). To avoid seeing uninsured patients for whom they will not be reimbursed, some specialists have stopped providing emergency room coverage in Phoenix (Draper et al., 2001). Also according to Draper et al. (2001), “…some specialists have cut back on their affiliations with traditional hospitals, choosing instead to devote more of their time to their own ambulatory treatment and surgery centers or specialty hospitals in which they have equity interests…these facilities offer the potential for physicians to generate higher incomes by sharing in facility profits”. “On the heels of financial difficulties that many attribute largely to managed care, physicians increasingly are refusing to enter into risk contracts with health plans, and health plans are reverting to fee-for-service payment” (Draper et al., 2001, p. 1). In comparison, there is a good deal of cooperation between public and private purchasers in Boston (Corrigan et al., 1997). 59% of Phoenix physicians and 61% of the Boston physicians are in practices receiving capitation for at least some of their patients (Lake & St. Peter, 1997). Factors considered in determining physician compensation in the Phoenix area: 31% for patient satisfaction surveys, 23% for measures of quality care, and 23% for practice profiles (Lake & St. Peter, 1997). With Boston, the factors read differently: 22% for patient satisfaction surveys, 17% for measures of quality of care, and 12% on practice profiles (Lake & St. Peter, 1997). Leadership Roles In Phoenix, Private sector purchases have not played a major role in shaping the health care market, nor have other community organizations consistently exercised leadership in the health care arena (Christianson et al., 1997). The same authors report that Phoenix health plans compete primarily on price for commercial enrollees and on benefits for Medicare enrollees, with little public information available that compares health plans in terms of patient satisfaction outcomes. A series of hospital acquisitions since 1998 have left national firms in the health plan market, although a new focus on profitability is leading some to eliminate unprofitable lines of business (Draper et al., 2001). Cooperation seems to play an important role in Boston. Three large care delivery systems have emerged in the last few years as a result of mergers between major hospitals located in the city proper (Corrigan et al., 1997). The respected leaders in the business community, organized consumer advocacy groups, and the public sector are not viewed as potent change forces (Corrigan et al., 1997). Corrigan et al. (1997, p. 1) also stated that “…virtually all respondents viewed the Boston health care system as very high quality…many expressed a strong commitment to protecting the market’s local institutions and preserving its not-for profit character”. Choices in Health Plans In Phoenix 66% of families have a choice in health plans (Trude, 2000). This is in comparison to the more than 70% of families in Boston that have the same choice (Trude, 2000). When it comes to opting between an HMO and a non-HMO, both cities report the same findings: 58% of families have a choice. Comparison and Analysis Phoenix has faced challenges in the mergers between area hospitals and other health care organizations. While it seems as though Boston merges to help one another out, Phoenix seems to only be merging when they find themselves desperate. Phoenix and Boston both rank closely together with their choices to families regarding health plans, with Boston only performing slightly better. Phoenix, though, is faced with its physicians being more rigid about their compensation. What this information means for both cities is that they are both faced with the challenge of maintaining proper compensation for their physicians for the right reasons. Phoenix needs to realize that the dire state that the health care system is in, does not need to be hindered by cut-throat operating between the area hospitals and physicians. This will be vital in the health care organization’s success. Clinical Practice and Delivery of Care Access to Physicians Boston seems to outshine not only Phoenix in its access to physicians, but the nation as a whole. In Phoenix, 18% of patients agree that their doctor might not refer them to a specialist when needed, compared to 12% in Boston (St. Peter, 1997). St. Peter (1997) also states that in Phoenix, 23% of primary care physicians report that they cannot always or almost always obtain referrals to high-quality specialists when medically necessary, versus a mere 12% that report the same problem in Boston. The Boston area does have 45% more physicians per 1,000 people than that of the national norm (29% more primary care physicians and 58% more specialists) (Corrigan et al., 1997). Mental Health Services Boston, again, is ahead of Phoenix in mental health services for its community. In Phoenix, 81 percent of primary care physicians indicate they cannot always or almost always obtain high-quality inpatient mental health care for their patients that need it (Shuchman & St. Peter, 1997). The same authors (Shcuhman & St. Peter, 1997) report only 63% of Boston’s primary care physicians have the same problem. The distance between the two cities is narrowed though, with closer reports of obtaining outpatient mental health services. 76% of primary care physicians in Phoenix, and 70% of Boston’s same physicians, report that they cannot always or almost always obtain outpatient mental health care for their patients that need it (Schuchman & St. Peter, 1997). Hospital Practice In 1998, hospitals in Phoenix began to increase their leverage with health plans, but financial pressures mounted as some physicians shifted focus from hospitals to independent specialty facilities (Draper et al., 2001). The Phoenix market has 10 hospital systems (excluding specialty hospitals)- down form 13 systems two years ago (Draper et al., 2001). In Boston, many hospitals have merged in recent years (Corrigan et al, 1997). The number of hospital beds is also slightly higher than the national average (per 1,000 population) (Corrigan et al., 1997), giving a significant advantage to Boston for the ability to provide service for its population. Comparison and Analysis It seems as though physicians in the Phoenix area do not have as much trust in their health plans as Boston area physicians report. There is much more frustration on the physician side in Phoenix for obtaining referrals to both specialists and mental health services. The hospital make-up in the Phoenix area does not have quite as strong of bonds to the community as the Boston area hospitals do. With doubt in the physicians mind, patient satisfaction in obtaining specialists and mental health services will be deeply affected. The lack of trust the doctors endure will have a trickle down effect on their patients. This will lead to many problems in the Phoenix area. Boston is providing more effective system with a higher number of hospital beds available to the population, something that Phoenix should really consider with its population growth. Boston definitely has an advantage over Phoenix in this entire area. Care of the Poor Statistics A national hospital management company is credited with helping to stabilize the Phoenix community’s major safety-net provider, but concerns remain about the area’s capacity to care for the uninsured (Draper et al., 2001). The Phoenix area has one of the highest rates of uninsured in the country, with more than one-quarter of the population lacking in coverage (Draper et al., 2001). Roughly 10% of Boston’s population is living in poverty (Devers et al., 2001). While the statistics are not quite as harsh as those in Phoenix, 8.1% of the “under 65” population have no health insurance, with 3 % of that being Boston children under 18 (Devers et al., 2001). Improvements Arizona has taken a step in the right direction to help cover the uninsured children in the state. “Arizona’s State Child Health Insurance Program (SCHIP), KidsCare, was implemented in November 1998, and roughly 80,000 children have gained coverage as a result of KidsCare outreach efforts- half through Medicaid and half through SCHIP…state officials had originally hoped to enroll 60,000 children in KidsCare alone and are now stepping up efforts to reach this population” (Draper et al., 2001, p. 1). Financial concerns are always an issue for the states when it comes to covering the poor, but an Arizona state ballot initiative passed in 1994 which created a tobacco tax, with 70% of the revenues dedicated to subsidizing health care for the uninsured (Draper et al., 2001). Also, “In November 2000, Arizona citizens passed two competing state ballot initiatives- Proposition 200 and Proposition 204- that earmark the state’s $3.1 billion tobacco settlement monies to expand coverage to the population without health insurance…the new funding will expand Medicaid eligibility by raising the income ceiling for eligibility to 100% of the federal poverty level, extending coverage to 130,000-180,000 Arizona residents who lack health insurance- a 30% increase over current Medicaid enrollment” (Draper et al., 2001, p. 1). The Boston community has a history of providing health care access to the poor and uninsured (Corrigan et al., 1997). Though the city has less of a crisis, Boston has taken steps to improve its uninsured population. Expansions in Medicaid and the State Children’s Health Insurance Program helped to strengthen the safety net, causing the state’s uninsurance rate to drop considerably (Devers et al., 2001). “Although attempts to provide universal insurance coverage have been unsuccessful, there have been continued incremental expansions in Medicaid eligibility” (Corrigan et al., 1997, p.
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