Two dentists and their patient smiling

Revolution Coming to Healthcare

Posted in:

Our American health care system is headed for an enormous transformation. Dramatic changes will occur in the way we pay for health care regardless of the existence of the Affordable Care Act. This transformation will take place as a parallel process; it must occur to correct our fractured and expensive health care system, which threatens our nation’s solvency.

New paradigms will profoundly influence our future expectations. What is to come is not really fully appreciated by physicians, other health care professionals and especially the public. There is an expectation that everyone should receive the medical services that they want and expect (at least if they have health insurance). As our health care system morphs, we may be headed to a confrontation between the competing interests of government, insurance companies, corporate medicine, health care providers and patients.

Our current health care system is based on fee-for-service. The more that is done for patients, especially expensive procedures, the more money is made. Ever wonder why there are so many heart and orthopedic hospitals and promotion of hospital cancer programs? That’s where the money is, and there is an endless demand for the services. As long as the bill is paid by private or governmental insurance payers, providers and patients are generally happy. Patients get what they expect, and providers are paid what they contractually anticipated. Meanwhile, the system is going broke, and Obamacare has not fundamentally changed this system.

Eventually, a new payment system is coming: A payer issues one check to be divided among all members of an organized group of providers for caring for a specified population of patients. The group, including physicians and hospitals, receives a single bundled amount regardless of the resources used plus a bonus payment for meeting predetermined efficiency and quality targets at year’s end. Under this new system, every hospitalization, procedure and emergency room visit costs the provider system money, resulting in less of a financial reward. The motivation to perform as many procedures and services possible vanishes.

The future health care system will also rely on cost-benefit and comparative-effectiveness analysis. Providers will use interventions and medical practices that are proven to be most efficacious, cost-effective and justified in relation to the benefit received by the patient and society. How much and what care is appropriate given the age and medical condition of the patient, especially at the end of life? Is that expensive diagnostic test really necessary? Is that expensive procedure really needed, and could the condition be addressed with less costly medical management?

The expectations of patients may be left unmet. Surgical and interventional specialists may rail against policies and regulations that curtail their ability to perform expensive procedures. Providers who make the most now will have the most to lose in the future.

Hospitals will adjust to changing revenue streams. Conflicts among providers may arise; competing interests between providers and patients may develop as they realize that the rules have changed.

Conflicts and disappointments are unfortunate, but these paradigm changes are not inherently bad. More care is not necessarily better care, and can be associated with poorer outcomes and higher mortality rates. The reality is that we cannot continue providing everything for everyone and sustain the future of American health care.

Medicare recently announced an aggressive schedule to transform payments over the next few years to hospitals and doctors from the current fee-for-service (volume) model to one based increasingly on quality and efficiency; insurance companies will surely follow.

The spending spree will be curtailed. This may truly qualify as culture shock.

Feldman is director of medical education and family medicine residency at Franciscan St. Francis Health. He is a former Indiana state health commissioner. Email him at richard.feldman@franciscanalliance.org.

Click here to read the article.

Comments are closed.