New Jersey's healthcare system touches all our lives and has a profound effect on the state’s economy. Unfortunately, the status quo costs far too much for results that lag the rest of the industrialized world. The U.S. pays more per-capita for healthcare than any country, totaling $2.5 trillion annually, but our life expectancy is just forty-second in the world. New Jerseyans currently pay more than $5,800 per capita in healthcare expenses. For a healthier and more vibrant future, we must do better.
To improve clinical outcomes, increase quality of life and reduce healthcare costs, New Jersey must address critical issues that will result in transforming our current episodic and acute healthcare delivery model into a continuum of ongoing care delivery. Some of these issues include Medicaid reform, care coordination and addressing the shortage of healthcare professionals serving our people
The Patient Protection and Affordable Care Act (PPACA) will expand Medicaid eligibility, and New Jersey must prepare. If the PPACA is fully implemented as scheduled in 2014, up to 500,000 additional New Jerseyans will become eligible for the program. A primary concern will be the availability of a continual and consistent source of care, since Medicaid patients already face access issues. Forty percent of doctors in America have restricted their availability to Medicaid patients, and only half accept new Medicaid patients. This has caused an increase in inappropriate and non-urgent emergency room visits. Studies have shown that the likelihood of Medicaid patients utilizing ER services is five times more than the privately insured.
Our state has to look for solutions. In 2006, Georgia established a managed care program for healthy adults on Medicaid, children on State Children's Health Insurance Program (SCHIP) and individuals with certain diseases. Since then, the state has not only benefited from $4.7 billion in savings, but also more importantly from an improvement in health outcomes. When implemented strategically, Medicaid managed care has the potential to improve clinical outcomes, improve access to care and promote an integrated and efficient delivery system.
Care coordination and collaboration are key, especially in our state, which ranks third in population diversity and is among the top 10 states with the number of residents age 65 and older. As our residents age and consume more medical care, the need to coordinate that care becomes even more important. New Jersey can institute its own market-based solutions. Well-designed pilots, such as plans to establish Accountable Care Organizations (ACOs), High ER Utilizer programs, integration of behavioral health services and streamlining end-of-life care should be developed and customized to support regional healthcare efforts. In the area of long-term care, we have glimpses of the future right here in New Jersey. Home- and community-based options that support independence, dignity and consumer choice are being implemented and need to be expanded. They are more cost-effective than nursing homes, and are usually the preferred option among those in need of long-term care.
Health information technology (HIT) remains the nexus and critical link to all of these solutions. To improve the overall quality, safety and efficiency of delivery systems, HIT will need to improve in its usability, interface and adoption. A 2006 RAND study found the U.S. healthcare system could save more than $81 billion annually if HIT was widely adopted. Computerized prescriptions will prevent medication errors; electronic medical records can ensure the availability of all relevant, patient-specific medical information at the point of clinical decision-making. The electronic sharing of disparate data can increase administrative efficiencies and help in the evaluation of new techniques and evidence-based medicine by providers. In healthcare, fragmented systems reduce effectiveness and cause harm, whereas efficient systems can save lives.
Of course, the best-designed, integrated and efficient system cannot work without the doctors and nurses who work directly with patients. New Jersey faces an emerging crisis in its physician shortage, and if we do not resolve it, other reforms become futile. In 2010, New Jersey dealt with a shortage of 945 physicians. This number is expected to triple in ten years, without taking into account the increased demand for physicians in healthcare reform and Medicaid. Of the 860 doctors who complete residency in New Jersey each year, only 32 percent plan to practice medicine here.
We need to create an environment in New Jersey that can cultivate, retain and attract our healthcare professionals. Medical school capacities, along with educational partnership opportunities, must expand in order to accommodate an increasing number of medical students. In order to make education more affordable to aspiring physicians, New Jersey can build upon its existing loan redemption program, which repays up to $120,000 in loans over four years to physicians who agree to work in underserved areas. Venues should be created for retired and volunteer healthcare professionals to serve the community and provide much-needed access to care. Our malpractice and tort system must also be fixed. Victims of malpractice should be compensated; however, the current system promotes frivolous lawsuits, encourages the practice of defensive wasteful medicine and results in physician exodus and exacerbates our physician shortage.
As a physician having served in both the private and the public sector, I understand the challenges that we are facing in our current health care environment and the critical need for change. Instead of looking for reasons that would not make a program work, we need to find ways to achieve excellence. To reach our common goal of a sustainable and robust healthcare system, we must work together in the search for solutions via public-private collaborations, promoting best practices and nurturing an environment of innovation. New Jersey has much work ahead of it and clearly the key stakeholders are all engaged. Together we can shape the future of our healthcare system and continually build upon our successes.