Understanding the Industry: The Second Sphere
If you're interested to learn more about the first sphere, then check out my previous post entitled "The Origins of the Healthcare Industry"
In this post, I will be continuing the series on understanding the healthcare industry by diving into the other sectors that I believe to be a part of the “second sphere”.
In my last post, I referred to Servicers, Providers, and Payors as being a part of the first sphere because they interact most closely with (or, at least, with what should be) the north star of the healthcare industry: Patients.
So, the “second sphere” sectors would be sectors and areas of the industry that don’t interact directly with patients when it comes to their main products or services.
“Second sphere” sectors of the healthcare industry are just as important.
Before we dive in to what these sectors are (IMO), let’s do a quick recap of what we learned in the previous post.
The diagram above shows where we landed in our previous conversation. In the first sphere, we have Servicers (the places and spaces where patients receive medical care & services), Payors (the entities that enable patients to have access to said care & services), and Providers (the people trained to provide medical care & services to patients). Then, of course, you have Patients centered in the middle to illustrate their importance.
Serving patients is absolutely critical to the mission of healthcare, especially when you consider that patients are the reason why we even have a healthcare system to begin with. Nearly everyone working in healthcare is in it because they want to “help” people, but it took the industry decades to really piece together what that should look like.
In my last post, we discussed briefly how value-based care and the Health Equity movement worked together to expand patients’ options in the first sphere sectors. But, to be clear, these movements needed some consequences and repercussions tied to them before the all players across the first sphere sectors moved towards implementation and change.
It may require peripheral players to clearly see & expose the shortcomings of the care delivery system.
I’ll never forget learning about the groundbreaking report “To Err is Human” (2001) published by the Institute of Medicine, US Committee on Quality of Health Care in America. At that time, it opened many people’s eyes to the fatal flaws that existed within the care delivery system. It was a clarion call to everyone in healthcare regarding the quality of the care that patients received.
This report clarified that making mistakes and errors is a natural part of being human. It illuminated the fact that the healthcare system should be creating systems and processes that prevent human error, instead of shaming and blaming the human that makes an error. This approach not only shifts the blame, but also reveals how much of these mistakes were 100% preventable and avoidable.
Although there may have been individuals with this same realization, it took an official report from the Institute of Medicine (IoM) to shake up the industry and catalyze a quality improvement movement. This speaks to the power, influence, and impact that peripheral players - or “second sphere” sectors - can have on the healthcare industry.
It’s important to remember that “Second sphere” sectors can have just as much, if not more, influence and impact on the healthcare industry.
As aforementioned above, the Institute of Medicine gave everyone in healthcare a wake up call. But, before this could cause changes in the care delivery system, it first had to create change in the regulations, policies, and standards that applied to this system.
First, let’s go over the Regulators!
Regulators are the entities within the healthcare industry that ensure the care delivery system (the first sphere mentioned in my last article) is held accountable to state and federal policies & regulations. Some I would consider to be more like accountability partners, while others are more like enforcers of these policies.
For example, the Joint Commission and the Center of Medicaid and Medicare Services (CMS) are enforcers. I mean, what healthcare organization is going to argue with the decisions that come from CMS? And while the Joint Commission can’t put hospitals out of business, not receiving their accreditation can be detrimental to a hospital’s business.
Other Regulators include the Centers for Disease Control and Prevention (CDC), the Health Resources and Services Administration (HRSA), the Occupational Safety and Health Administration (OSHA), Indian Health Services (IHS), and the Veterans Administration (VA).
As further insight into the Regulatory landscape, below is an infographic from the American Hospital Association (AHA). Although, it focuses on Regulators from a hospital, many of them regulate other areas of the industry as well.
Next up, we have the Legislators!
The Legislators have the power and privilege of creating the policies and regulations that Regulators are enforcing and holding others accountable to. This sector of the industry can also include foundations, organizational or agency departments, and other advising organizations - all of which work very closely with the healthcare legislative process.
I often refer to health policy as the “rules of the game”, the “game” being healthcare services and the care delivery system. Take the Affordable Care Act (ACA) for example, known colloquially as Obamacare - this law shifted a lot of things for the healthcare industry as a whole.
One result of the ACA that you may not know is that it gave each state the power to create its own health insurance exchange. These exchanges were meant to be public so that adults and children who live in low-income households can still have access to healthcare coverage, and thereby healthcare services.
What were some of the other benefits of the passing of the Affordable Care Act?
As you can see in the image above, this Act left an impact across many different sectors of the healthcare industry from pharmacy & medication costs to expanding access to preventive care (i.e. Annual Wellness visits, Annual Well-Child visits). I would highly encourage any developing professionals to spend time learning more about this Act, as it has had a profound effect on the way that we deliver healthcare services today.
And finally - at least for this article - we have the Suppliers!
This sector of the healthcare industry literally supplies and equips those working in the “first sphere” so that healthcare services can be delivered. Pharmaceutical companies, Medical equipment & device companies, and Medical supplies manufacturers are all considered big players in this sector.
Below, you can see even more examples of companies and organizations that are in this sector, specifically as Medical equipment & device companies.
The examples listed above are the more obvious entities that come to mind. But, this sector can also include technologies (i.e. Data softwares, mobile/smartphone applications, Medical record keeping systems, Medical coding and billing systems) as well as general maintenance (cleaning supplies, laundry services, machine repairs & upkeep).
These “second sphere” sectors are a ~bit~ more removed from delivering direct services to patients, but they are just as important and vital as the “first sphere” sectors. Regulators, Suppliers, and Legislators are responsible for enforcing policies, supporting Servicers and Providers, and protecting patients and other consumers respectively. In each of these sectors, there are many companies and organizations that work together to accomplish these responsibilities.
Plus, within each sector, there are many people who work in different roles working together to accomplish the composite goal of the organization. In later posts, I plan to break down what some of those roles might be.
Leave a comment down below!
Are there any other examples that fit within the Suppliers, Legislators, or Regulators sectors?
Is there a distinction between the sectors that I missed? Share it below!
What has been the most interesting sector to learn about so far?