Although no one can predict the future of health care delivery and finance with confidence, transformation is certain, and physician success will depend on understanding the key environmental drivers of change and responding by adding value.
Health care cost inflation at three times the rate of overall inflation and workers’ earnings, and a rapidly increasing health insurance premium cost share paid by workers, are no longer acceptable to the public or employers. Our increasingly well-informed patients are demanding affordable health care, participation in treatment decisions, and access to physicians who understand and comprehensively address their needs. They are willing to abandon long-time physician relationships, direct access to specialists, choice of hospitals, and access to prestigious institutions. Employers expect quality care for their employees and will not pay significantly more for it. They will not pay for the reputation of providers; they do value location of physician offices and mostly seek low costs.
Dr. Martin Brotman
Our future success depends on the value equation:
Value = Quality (safety, outcomes, patient experience, transparency)/Price
There will be a progressive shift from volume/fee-for-service to value. Employers will shift from costly defined benefit plans to defined contribution plans. Employees will thus become price-sensitive shoppers. Some employers will discontinue health benefits and pay the (lower-cost) fines while their employees shift to exchanges, perhaps at Medicare (or even Medicaid) provider reimbursement rates. Employees will choose high-deductible plans and decrease their elective health care utilization as they find they have to go into their own wallets first.
Physician providers will, through various payment methods such as capitation, accept risk; specialists and hospitals will become cost centers, and hospitals could become commodities.
Providers will progressively integrate and physicians will accept salaries, seeking income security, affordable responsive management, and scale-driven partnerships. The jury is still out on the affordability, scalability, and efficacy of patient-centered medical homes, accountable care organizations, etc.
Employers will increasingly become catalysts of change in health care delivery, having lost confidence in delivery system motivation, health plan strategies, managed care, potentially monopolistic integration and consolidation, and the government’s ability to lead the essential bending of the health care cost curve.
Employers will push for health plan–sponsored markets that drive market share to "high-performing provider organizations." They will demand integrated, coordinated multidisciplinary team care, with smooth transitions among providers, proactive care to promote wellness, patient-centered care with patient and family involvement, and transparent, electronically documented quality outcomes. They will tie their defined contributions to the price of the highest-value systems, and will support narrow networks to facilitate the cost-effectiveness of scale. There will be few negotiations and "deals"; systems of providers will compete based on objective measurements. Large employers are selecting, and will increasingly select the highest-value specialty providers and will send all of their employees with high-cost needs to a small number of such providers, regardless of geographic proximity, with all expenses paid. Employers will use their expertise in managing retail unit costs to enter and compete in the health care markets as disruptive innovative providers.
How will gastroenterologists survive and thrive? Accept the reality of transformation; accept that historic success and good will are not part of the value equation; spend time defining how we will add value as defined by patients, employers, and government; choose the team that has the same willingness to transform; facilitate cost reduction efforts; and provide excellent patient experience (including access and education) and excellent referring physician experience (including availability, accountability, and technical and cognitive services). Coast only if you are a short-timer with a well-funded pension plan.
Martin Brotman, M.D., is senior vice president of education, research, and philanthropy at Sutter Health, San Francisco.
