Hospitals and physicians’ groups may become more prominent in 2012 as a result of the politicization of healthcare reform in 2011. Aware that some reforms may actually stick, healthcare providers are racing to beat Congress to the punch.
Ultimately, said Steve J. Schwab, MD, chancellor of the University of Tennessee Health Science Center, hospitals and physicians want to provide the kind of improvements in healthcare delivery debated hotly in Washington, but they've been stymied by financial issues.
“What Congress has said based on a large body of evidentiary data is that they are trying to build systems for what they term ‘accountable care,’” Schwab said. “What we have in the U.S. is by and large high-quality fragmented care – fragmented in the sense that there is no one entity responsible for a group or individual’s care.”
Schwab noted that within the VA system and military healthcare, one organization controls delivery of services to individuals and is responsible for patient outcomes from major surgery to prescribing eye glasses.
In the private world, patients are largely on their own to look at preventive care issues, which are less expensive than the acute care issues that result from ignoring them.
Hospitals follow suit by developing and employing the latest in technological advances to attract patients.
But the federal government, whose power is in controlling reimbursements through Medicare and Medicaid, may be able to fundamentally restructure hospitals’ and physicians’ delivery of care.
“What the government appears to be working toward is the development of systems of healthcare so that the governmental providers can deal with that system,” Schwab said. “If you have so many covered lives, you want to contract those covered lives to a system, and the system assumes all aspects of the care of that group.”
That, he said, could take 20 years or more, but in the meantime there is movement on the ground.
“What you can see is a huge trend toward either hospitals joint-venturing with physicians’ groups or hospitals directly employing physicians’ groups,” Schwab said. “It’s moving reasonably fast in this market, but it’s moving faster in other markets.”
One drawback of that, though, may be a stifling of technology, said Don Pounds, senior vice president and CFO of Baptist Memorial Healthcare.
“I believe it comes down to technology and what a provider has available for a patient,” Pounds said. “Consumers are looking for the best technology they can get. Cost is always a factor, but a lot of that’s played into their insurance. A lot of times insurance companies are picking up more of the cost.”
But if hospitals and physicians are reimbursed less for their services in the future, the money available for research and development of new, innovative treatments is decreased as well.
“The big thing is setting the (reimbursement) rates for the future, and we’re going to see reduction in those rates,” Pounds said. “We have to adjust to that.
“If the reimbursement rates drop and premiums drop for individuals, then the (medical) technology companies are going to have fewer dollars to spend. What you pay for a piece of equipment would have to drop as well and these companies may not have the profit margins they’ve had.”
But profit incentives speak in high volume during an election year, and Pounds isn’t ruling out an upset in the 2012 presidential election. The winner, he said, will have a big opportunity to make changes to healthcare reform passed this year.
“(After the election) we could be back in a ‘wait and see’ again,” Pounds said. “I’m not sure we’d go completely back to the drawing board, but someone is going to put their stamp on some changes.”
Donna Abney, executive vice president of Methodist Le Bonheur Healthcare (MLH), said that none of this is surprising. Hospital systems are already experimenting with new financial structures, some based on studies by government health agencies, before new rules are engraved in stone.
“This being an election year, we’re going to have a lot of possible waving of the saber for changes to the reform package, and in fact some pieces and parts of it may change,” Abney said.
“We believe fundamentally that a lot of the movement in compensation or reimbursement to providers around quality and performance and customer satisfaction are going to stick.
I doubt they’ll go back because (the changes) are just too logical and they’re good for consumer and payers and providers as well.”
Specifically she mentioned systems of rewards and penalties based on quality of care and customer satisfaction based on data from the Center for Medicare and Medicaid. These systems are meant to drive physicians to greater efficiency.
Abney noted that MLH is going the route of drawing in patients based on quality of care by providing more information to the public.
“We’re very committed to transparency,” she said. “We post all of our metrics on our website, and we think that will resonate with certain populations. If you have a chronic disease, then you are more of a quality shopper. So we want to put all of the information out there.”
The result of patients shifting from cost-consciousness to quality-consciousness may mean that more centralized services are in as high demand as new technology.
“Where we are very active in employment and alignment is with physician partners, Abney said.
“As you look at so much of what’s coming in the future as it relates to bundled payments, or pay for performance, or any of the many pilots that are being experimented with, it’s so important that physicians and hospital systems are on the same page, that we have incentives to do the same good things at the same time prudently, using resources and delivering high quality.
“The best way to do that is to change the financial relationship between doctors and hospitals. In the last year or two, we’ve been very aggressive in our alignment. That’s a huge push for our system, and I suspect it will continue to be huge for the next 18 months.”
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