Moving Forward With or Without Health Care Reform

Now that we have all digested the Health Care Summit discussions, what do you think is going to happen with health care reform? Like many of you, I continue to be concerned about what might develop, but I am turning my attention to issues and strategies that I can impact. Payment reform that focuses on increasing value from the payer and customer perspectives are likely to move forward with or without health care reform.

The health care field experienced tremendous growth in the 2000s, and it is unlikely that we will continue to see that level of revenue or volume growth if payment reform occurs. One change, such as reducing funding for readmissions, would significantly impact the rate of growth for most acute care providers and short stay skilled care, but might increase the episodes of home care or other services provided through home and community based services.

There are so many options to pursue; it is hard to know where to start. Many organizations have begun by aligning with physicians. The Medical Group Management Association (MGMA) 2008 data shows that more than 50 percent of all physicians practicing in groups of three or more are employed by organizations that also own hospitals—up significantly from 2005. Other health systems are aligning with post-acute providers to assure they can integrate and improve transitions of care that result in fewer readmission rates. Others are developing and expanding their Medical Home concepts with their affiliated primary care groups to improve care coordination, patient communications, and support of informal caregivers.

Insurance companies have also started down the path of payment reform. Based on some preliminary research we have seen over fifty payer organizations are beginning to experiment with payment reforms. Some are aligning themselves with providers to fund care delivery redesign using their data and a collaborative approach. Other payers have developed contracts which are providing incentives designed to move to greater value and away from volume. Others are evaluating some of the current payment demonstrations to determine how to replicate the successful efforts.

There are a series of articles on strategy and leadership for these times in the McKinsey Quarterly, 2010 Number 1. Two articles in particular, “Dynamic Management: Better Decisions in Uncertain Times” and “Navigating the New Normal: An Interview with Four Chief Strategy Officers” are great. While the strategy officers interviewed are not health care executives, their insights might provide some fresh thinking about how to decide what to do next and what to expect.