Economic ‘Shrinkflation’ Strikes Healthcare | MedPage Today

With U.S. healthcare costs on track to make up one-fifth of the economy by 2031, and increases in healthcare spending consistently higher than GDP growth, healthcare consumers are increasingly facing effects of “shrinkflation.” For readers who are unfamiliar, shrinkflation in economics refers to the process of items shrinking in size or quantity while the prices remain the same or go slightly higher. This can apply to any product or sector — including healthcare.

An Axios article titled, “Health shrinkflation: Patients wait more for less,” notes how the U.S. spends more on healthcare than almost any other nation, and patients are paying more and more, in order to get less and less. This includes less “face time” with their doctors and longer wait times. Other media reports confirm that many hospitals and clinics are ordering doctors to shorten appointment times in order to see more patients per hour (increased volume).

The effects of shrinkflation also include increasing delays or denials of timely healthcare access, with patients having to wait weeks or months for an available appointment with a primary care provider or a referral to consultants or specialists, even for critical issues. Increasing wait times and delayed access, shrinking appointment times, and increasing patient volume per hour are noted as chief causes of doctor and patient dissatisfaction.

Meanwhile, patients are paying steadily rising healthcare premiums for declining service quality. While many intersecting factors are at play, I’d like to focus on one major driver many of us have experienced firsthand: workforce shortages.

What’s Going on Here?

Among the causes for healthcare shrinkflation, one critical issue cited is the exodus of doctors, mid-levels, nurses, other “hands on” healthcare workers, as well as potential future healthcare professionals moving away from direct clinical care. As of 2020, the healthcare industry employed approximately 11% of all American workers, but with so many clinicians leaving healthcare since the pandemic, this number may be on the decline. This exodus has resulted in reduced provider and staff availability, leading to accelerating gaps and delays in patient access.

These shortages are widely recognized and being felt all across the country. The insufficient staffing numbers also further aggravate other critical healthcare workplace and systemic issues such as worker burnout, increasing emergency department and hospital boarding, increased service line closures, more hospital closures, and an accelerating rural healthcare crisis. These, in turn, contribute to shrinkflation.

While the pandemic surely played a role in driving many to leave healthcare, the worsening of conditions in healthcare workplaces began pre-COVID. With the growth of healthcare into a burgeoning market sector it has increasingly come to the attention of “big business.” Many suggest the worsening of the healthcare system and workplaces is in large part related to the increasing consolidation of healthcare practices, systems, and related sectors. The system is often now driven by large, historically non-medical companies with a chief goal of expanding into new, seemingly profit-attractive market sectors; they often have no direct connections to or input from the healthcare workers who they now supervise.

Doctors and other clinicians facing these worsening conditions find themselves increasingly disenfranchised, burned out, dissatisfied, marginalized, and facing the moral injury of being forced to do more with less, thus producing worse patient outcomes. They find they have no seat at the table with company decision-makers, no voice to advocate for patients or for the safety and well-being of their workplaces, and no say in how their clinical workplaces are being run.

Other factors pushing clinicians away from practice include the increasing, unchecked violence within our healthcare workplaces, leading healthcare to be ranked as one of the most dangerous professions. Another factor is an explosion of healthcare administrators and managers — an increase of 3,200% in the last 35 years — often with no clinical background. The administrator-physician relationship is fraught, with the goals of achieving the bottom line and providing patient care often at odds.

These are the workplace conditions cited as compelling reasons for the accelerated worker exodus out of healthcare, or for the increasing movement towards unionization by those workers who are left.

Will These Worker Exoduses Continue?

Some pundits feel that projections of future healthcare worker shortages, though already concerning, are significantly underestimated. These pundits note that the underestimates may stem from: a lack of recognition; unaddressed and worsening workplace disruptors; and the pervasive assumption that COVID was the chief cause of worker shortfalls but is now less of an issue.

I believe workplace and workforce issues are correctable — when and if stakeholders collaborate to address these disruptors.

But major changes are necessary. It will take significant collaboration among all healthcare stakeholders and an effort to address the skewed market incentives that encourage players to achieve the bottom line at the expense of patient well-being. The “suits versus scrubs” oppositional mentality and posturing will need to end. Without these changes, the exodus from healthcare will continue, contributing to worsening shrinkflation — and will eventually lead to failure of the system.

Harry Severance, MD, is an adjunct assistant professor in the department of medicine at Duke University School of Medicine in Durham, North Carolina. He frequently advises and mentors healthcare workers and managers at all levels on issues involving the healthcare workplace. The views and opinions expressed are the author’s own and do not necessarily represent opinions and positions of the author’s employers and affiliates.

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