Over the past six months I have been traveling around the country speaking with leaders from a wide variety of health care provider organizations about care integration, delivery redesign and value-based payment.
There are certainly leaders who are anticipating the future market, but there are at least as many who are reticent to evolve. The hesitation, and for many a cold skepticism, stems from previous false starts (think 1993 to 2000) and the fact that, in most markets, transformational change is more of a specter than a reality. If you are still skeptical, wondering if it makes sense to start integrating care now or to wait for the market to bring more clarity, this article is for you.
Five Fiscal Realities
If you believe the following five realities are relevant to your near-term future, the time is now to build your integrated care organization.
1. The financial crisis and federal budget math. The world's financial crisis will not be remedied anytime soon. Unlike the 1990s — when the tech boom emerged, accelerated growth, and took the pressure off employer and government budgets — the current low growth seems likely to persist. This situation sets up a slow-motion train wreck of declining tax revenues affecting Medicare and Medicaid, pushed steadily along by an aging population. The result will be growing pressure on entitlement program payments to providers. With the core form of payment being fee for service, we can expect payment per unit of service to get squeezed mightily; a host of other initiatives, many of which will have a punitive flavor, will curb spending per unit of growth.
2. Re-emergence of value- and risk-based payment. Providers are in the best position to manage care delivery and curb cost growth, but they require different incentives to make the solution economically viable. Hence, some old ideas from the 1990s are new again, along with a range of creative new payment models that still are being tested. But this time, it is provider driven. If you're skeptical of the viability of new value-based payment models, you need only to look around. From the independent physician associations of California, to the clinical integration programs taking hold in the Midwest, to the more than 30 private, pilot accountable care organizations, the proof of concept is already here.
3. Chronic disease as a driver of demand. By 2030, it's estimated that 40 percent of Americans will suffer from some sort of heart disease, 50 percent likely will be obese and 10 percent of the world's population will have diabetes. Americans are getting sicker at a disturbing rate, due to aging and lifestyle. The mushrooming of chronic disease suggests that if the United States and other developed nations have any hope of slowing health spending growth, they will need to develop widespread and proactive approaches to managing chronic disease. Managing chronic disease is time consuming, but organizations that offer real solutions will be rewarded by the market.
4. Obsolete organizational structures. The typical hospital episode in the United States is analogous to buying an airline ticket and then having to choose, and get separately billed for, the pilot (at the same time knowing that the airline has limited control over, or accountability for, the actions of the pilot). It seems absurd, but that essentially describes the voluntary medical staff model that dominates the U.S. health care system.
The voluntary medical staff model is simply not up to the challenges of a 21st-century health care system. New models of alignment for institutions and physicians are required, but I'm not talking about joint ventures of ambulatory revenue streams or paid medical directorships. Unlike the "deal" approaches of the past, future alignment must be both extensive and durable. This no doubt includes physician employment, but also can take the form of independent provider networks and shared governance models that have stickiness in their shared information systems and clinical care programs.
5. An imperative for care redesign. Traditional "transactional" models of care are becoming increasingly unsustainable. Success in managing chronic disease and taking outcomes risk for populations requires that delivery models migrate from transactional to "nearly continuous."
We have all heard the story of the congestive heart failure patient: If only his weight were monitored and he received proactive diuresis, that hospital stay could have been avoided. Similar scenarios play out thousands of times per day, not just for CHF patients, but also for a range of conditions. Fundamentally, no matter how good the transactional model, it's going to fall short in managing continuous and complex needs.
Complex problems require complex organizations to manage those problems. We need to move from a model that is organized around the interaction of a single doctor with a single patient to one that employs a well-managed and complex organization of providers and information to continually manage the care of a patient through time.
As the saying goes, if it were easy, it already would have been done. Responding successfully to these realities will not be effortless, but like it or not, it's necessary.
For you and other health system leaders, the place to begin is with the physician community serving your organization. After all, care integration is about fundamentally changing care delivery, and that can't happen without thoroughly engaging the physicians. Health system leaders must identify a core group of supportive physicians and begin the hard work of building a coalition of the willing. This means cultivating an environment and appetite for learning and change. Almost certainly not everyone will get on board, but unanimity is not required. What is required is a critical mass of physician supporters who see the same future and are ready to learn and teach a new approach.
As Eric Hoffer, famed author on the subject of change, once said: "In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists."
Greg Scrine is the managing principal of GE Healthcare Performance Solutions in Barrington, Ill.