Provider organizations must prepare for reform

August 1, 2009
Kerry Shannon

Proactive organizations will begin a painful transition to emerge as larger, fuller enterprises with concentrated authority designed around very different roles and responsibilities than what they have today

Change in healthcare is slow and painful for many reasons, and the problem is encapsulated in the aphorism, "Where you stand is where you sit."

Due largely to the chair problem, people are in wait-and-see mode-wanting details before making any decisions. Yet, there is a great deal of information available about areas that are nearly certain. Among the intriguing things about our current state is that we may be poised to have people and institutions that behave ethically. We could witness everyone from caregivers, administrators to legislators win by doing the right things for patients and families.

Four things every provider organization should absolutely be working on right now are:

The motivation for doing so is to be able to succeed in a world that rejects most of the economic drivers of today's reimbursement environment. We appear to be returning to capitation. Conceptually, the future will force accountability for a population's health into an aligned provider enterprise. Cost will be reduced through data availability, preventive medicine, standardization, multiple technology enablers, leverage of human capital and incentives for demonstrating quality.

Organizations will be compensated for maintaining health status through routine care and interventions deemed to be appropriate. Whether this results in Accountable Care Organizations, Medical Homes or something else is less important than the idea from which they have arisen. As financial success becomes dependent on doing what is most efficient, unproven tests and treatments will be discouraged. This is antithetical to the way most organizations behave but an idea society is embracing because it is intuitively appealing and has yet to be actually implemented or criticized.

As the struggles of implementation begin, leading organizations are seriously considering the role of physicians in the future, which forces the question of how medical education will change. Some of the elements for these changes have existed in academic medical centers and rural settings for years. Many AMCs have allowed and encouraged a shift from a research priority to a clinical priority including hiring full-time physician clinicians, where a decade earlier such a notion would have been heresy.

Rural settings have long made use of physician extenders and an increasing number of organizations are following. It seems clear that some physicians in the future will have primarily a supervisory role while others will be focused on only the most difficult issues-those items not (yet) standardized or able to be leveraged.

Every organization should be thinking about physicians in conjunction with standardization as the declines in hospital reimbursement will demand it for survival. Many organizations and individuals will erroneously believe they will function well in the arena of solving the most difficult issues, be they diagnostic or treatment-related. For the future model to work, there will be few distinguished centers for the thorniest problems.

Consider the fact that if you ask reasonably knowledgeable people to name the best cancer center in the country the same two names come up over and over. They have distinguished themselves. Ask the same question for any other clinical category, and there is no continuity of response.

Among the many fascinating elements of the next decade will be the role of primary care and the primary care provider. Will primary care gain respect and financial reward not as a scorned gatekeeper but as a trusted advisor? If not, we can anticipate much less care being provided by physicians which could be fine too. In either case, patients with chronic illness will have a "primary" level of care that is dependent upon technology for monitoring and communication. This has demonstrated cost savings and increased patient satisfaction and will be increasingly widespread as pressure on both increases. We can anticipate these kinds of data forming the basis for future reimbursement.

The constantly evolving cycle of research and care advancement will force agility into the system by making dynamic those things which are standardized, continued discovery across the biological and interventional continuums, and the unanticipated surprises nature and evolution provide. While volume protects organization from demise in today's environment, that will not be true in ten years. Ultimately, that is very good news. Now we just have to get people thinking outside of their chairs.

Kerry Shannon is a Partner with CSC Healthcare Group

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