It is hard to actually assess the pace of change in health care. We tend to focus on issues such as technological change in the form of new drugs or devices. Some of these agents change the diagnostic or therapeutic paradigm for selected patient populations while many add little value to patients while driving costs higher. We also note that health care has become much like airline travel, both being increasingly just commodities.
However much we think health care has changed, I am convinced we have seen nothing compared to the transformation we are likely to see in the next decade. I am always leery about putting timetables to predictions, particularly to changes anticipated in the health care environment. I recall my mentors making dire predictions over 30 years ago regarding the economics of health care, many of which I believe were spot on, just in the wrong time frames.
Whether state driven health care reform is the primary driver or not, payment reform is going to change the business of health care in a fundamental way and I predict it will happen soon. How it plays out is where it will get very interesting because it will involve a more fundamental change in what health care providers are incentivized to do. At this point in time, most physicians (who do most of the provider billing) are paid for activity. Whether through their own small businesses or via corporate incentive programs, the mantra is do more and get paid more. At my own institution, we tally both dollars and RVUs and benchmark them against other similar practitioners. The biggest RVU pop is when we do procedural things to our patients and bill for these things. What is not counted is counselling, reflection, and prudent non-intervention. Such "worthless" activities don't pay the bills.
There is a great deal of talk about how we will adapt to a world where we will be held accountable for efficiency, that being health outcomes per dollar spent. We are still in the talk stage. My incentive program for the coming year is still based upon keeping the click rate up. I realize if we are to stop exploding health care costs, this will need to change. Outside of the increasingly isolated MD community, there is a growing consensus that continued growth of health care costs is at odds with the financial health and stability of the country.
It is a challenge to even think about how we adapt to circumstances where our rainmakers become the source of our worst financial hemorrhaging. Much of health care is a capital intensive and low margin business. In this world, small changes in payments induce huge changes in the bottom line and big bets made at one time where the fundamentals looked good can quickly turn into really bad bets. The push now is to consolidate, grab market share, and optimize your position to build lean and focused shops. To survive in a not paid by the click world, those who will be employed by these entities will need to be salaried and their success will be measured by how well they husband resources, not by how much they do. I would hope that there will be some sort of patient outcome which can be measured as well. I suspect that there will be a rapid transition from billing/collections as a measure to dollars spent. However, I simply cannot figure out how this transition happens?
Will we thread the needle and have a bumpy but bloodless transition, or will there be a blood bath? I suspect the latter. One option is to say no to the third party payment model. For major players with substantial sunk costs in buildings and equipment, and business models based upon expensive interventions that few patients can pay, saying no to insurance will not be an option. They will simply have to cut costs and re-engineer how they do business or die, and many will die. Many physicians are fleeing to the safety of large health care networks and seeking employee status. This might give them brief refuge but the corporate world is not notable for safety and guaranteed employment. When big companies which cannot raise prices start to lose money, they lay off people, the most expensive ones first.
I also think that those who can practice in a low overhead environment independent or semi-independent of insurance will increasingly take the risk and derive payment from those who receive services. There are lots of models out there now such as SimpleCare (http://simplecare.com/) or a variety of concierge care options. I think this is where the action will be. This will be where creative destruction will give rise to the future of health care, where entrepreneurial ambitions will play out. They will build a patient responsive industry because they will derive their resources directly from patients.
Many megahealth care entities will simply not make it. No one in the middle portion of the 20th century could imagine that the great industrial enterprises in Detroit, Cleveland, and Buffalo would be abandoned as rusted hulks by the end of the 20th century. Those industries who survived in the US became lean, focused, and efficient, and competed successfully by delivering value. It is a lesson well worth learning.