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Health Care Reform – Part Three

Ron Charpentier, COO – BreatheAmerica

In part three of this post, we’ll discuss why the transition from fee-for-service medicine to new reimbursement methods that reward providers who can keep patients healthy, rather than just treat illness, is quickly coming.  This new reimbursement approach will change financial incentives for providers 180 degrees as we move away from “sick care” and towards our growing understanding of what “health care” should mean.  Although there is significant industry inertia working to maintain the status quo, there are a number of converging influences that will eventually gain enough momentum to flip the health care reimbursement system on its head.

Here are a few:

  • Recent health care spending slowed significantly.  In 2012, GDP actually increased at a faster rate than health expenditures.  However, with the economic recovery gaining strength, industry experts expect that health care spending will return to annual increases significantly greater than the growth in GDP.
  • Increasing health care costs will lead to an even more imbalanced value equation that will force average people to either reduce the care they receive because they can’t afford it, or drain their bank accounts as they work to accesses the care they need.
  • Rising health care costs will cause employers, payers and patients to seek lower cost care, but any compromise in quality will not be tolerated.
  • Health information systems will continue to become widely adopted by health care providers – in 2012, 44% of hospitals and 40% of physicians had implemented an Electronic Health Record (EHR) system.  Access to clinical, financial and operational data will allow providers to identify critical care pathways that produce the best cost and quality outcomes.
  • Access to quality, on-line health information is leading to a growing public awareness of individual health status, which is allowing individuals to seek providers that practice according to the most effective protocols and that often involve the newest, most effective, treatment methods.
  • Health care consumerism will continue to grow as patients pay an increasingly larger portion of their health care costs.  As providers produce better reporting on their performance, consumers will find it easier to select the best providers for their care.  As patients begin to act more like consumers, they’ll also take on increased ownership over their personal health and care decisions as they relate to spending.  Finding ways to stay healthy will mean lower out pocket costs, which will justify the investment of time and energy into maintaining individual health status.

Essentially, as we all become more informed health care consumers and providers become more effective in communicating their cost and quality performance; employers, payers and patients will become more capable, and increasingly more comfortable, selecting providers that consistently deliver quality care and outcomes.  As information on health care performance becomes more available and reliable, the desire for indiscriminate “choice” will be replaced by the desire for making an informed decision to “select” quality care providers.

In other words, as quality is documented and validated, health care purchasers will become increasingly more comfortable with narrow, high performance provider networks.  The better performing networks will eventually contract for greater populations of consumers and the resulting patient volume will allow providers to shift their focus from performing services for a fee to keeping people healthy.

The future is near.  As a health care consumer, look for providers that embrace, and are committed to, high quality, low cost, documented care.