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Today’s AgendaToday’s Agenda
Why health care has to change, and why it has to now
How health care will change over the next two decades
What part information technology will play Other cost containment mechanisms
What’s Not On Today’s What’s Not On Today’s AgendaAgenda The magic bullet (single factor solutions) How IT will magically improve health care without any
effort on anyone’s part Ways to “build a seawall” against health care reform How to find $10 trillion of other people’s money over the
next decade to allow us to continue with the current FFS mess (the Chinese are on to us)
Why can’t health care cost Why can’t health care cost grow infinitely?grow infinitely? Health care costs compete with all other costs:
transportation, investment in innovation, education Competitors who spend more on raw materials generally
lose to competitors who spend less; health care is a raw material for all other goods and services
We are losing global competitiveness, partly because it costs too much to provide health care to our people relative to other countries
Poor global competitiveness=high unemployment for a really long time
What’s The Problem?What’s The Problem?
Theories about what’s wrong with health care: Cost
It’s greedy (insurance companies, doctors, hospitals, pharmaceutical companies); if they were eliminated from the equation, cost would come into control.
Access It’s that I’m paying for everyone else; if I just weren’t paying for
the uninsured, I could afford it. Or, if I could eliminate the cost shift associated with the uninsured, I could afford it.
Quality It’s that the quality is so poor; if everyone would just do the right
thing, health care would be affordable.
Okay, There Are At Least Two Okay, There Are At Least Two More ProblemsMore Problems Problem 1: We think there’s only one problem. Problem 2: Even if we think there’s a problem, not
everyone’s sure they want to fix it.
The Road To Hell Is Paved With The Road To Hell Is Paved With Good Intentions And Other Good Intentions And Other People’s MoneyPeople’s Money Third party payer system creates gigantic pool of
unsupervised money Innovators learn how to provide more stuff, in bigger
billable chunks Giant sucking sound: providers of care hooking hoses up
to government/business treasuries and turning on the vacuum
Managed care clogs up hose, open access clears clog Designing larger bore vacuums is a growth industry American health care inflation roughly double what it is in
other developed nations since 1965
International Comparison of Spending on International Comparison of Spending on HealthHealth1980–20041980–2004
Data: OECD Health Data 2005 and 2006.
Average spending on healthper capita ($US PPP)
Total expenditures on healthas percent of GDP
Schoen C, Davis K, How SKH, Schoenbaum SC. US health system performance: A national scorecard. Health Aff. 2006;25(6):w457-w475.
8
“Ask not what your country can do for you, ask what you can do for your country.”
John F. Kennedy, POTUS
“Somebody has to do something, and it's just incredibly pathetic that it has to be us.”
Jerry Garcia, Grateful Dead
What Will Oppose The Status What Will Oppose The Status Quo: Megatrends Quo: Megatrends Consumerism/free markets (health care as service
industry): retail clinics, commercial telemedicine, concierge medicine
Data and transparency: performance reports for providers on the web (I think there’ll be an app for
this), need for aggregation into larger entities for measurement
purposes/performance improvement
Globalization: offshoring, medical tourism
Believe It Or Not, PPACA Is Believe It Or Not, PPACA Is Here To Help: Little Here To Help: Little Understood ProvisionsUnderstood Provisions Near universal coverage, phased in Center for Medicare/Medicaid Innovation Independent Payment Advisory Board
(replaces RUC?) ACO pilot modeled after Physician Group
Practice Demonstration Project
The Role of IT: Will It Save The Role of IT: Will It Save Us?Us? “Information is not knowledge. The world is drowning
information, but slow in the acquisition of knowledge. There is no substitute for knowledge.”—W.E. Deming
More than ever in the information age, information translated into knowledge is power.
IT is a means to knowledge, not an end in itself IT requires the user to change workflows—this is a good
thing IT is an equalizing force; it will reduce the power
asymmetry between providers and patients—also a good thing
Other Mechanisms You’re Likely To See Intensive care management and coordination
by whatever entity is at financial risk (provider, health plan, ACO, government, business)
Predictive modeling Guideline adherence incentives for both
patient and provider Patient activation coaching Assembly of patient care teams
Take HomesTake Homes
American health care is unsustainable in its current form, and it is no accident that reform is upon us now
The change in the market dynamics will be from accountable for volume only to accountable for cost and quality outcomes
The new markets will be driven by consumerism, data and transparency, and declining relevance of geography in service delivery, like other goods and services
IT will enable, but not be a mission unto itself; it will reduce the power asymmetry between providers and patients/consumers, and reward those that can turn information into knowledge to serve customers better
Teams will win over individuals as complexity increases; this will drive aggregation and larger units of delivery