Bigger Is Not Always Better

Submitted by hci3-usr on Saturday, March 11, 2017 - 04:36

Newtown, CT – March 11, 2017

If we know that incentives matter, why do so many continue to ignore their effect? Last week we postulated that the planned incompetence of large purchasers was designed to maintain and benefit from dominant market positions. Two recent posts in the NEJM Catalyst reinforce that theory. In one, Julia Alder-Milstein exposes the threat of interoperability to incumbent dominant EHR vendors and large provider organizations. This reprises a theme that we had developed as part of a RWJF-funded report published in 2015 on the state of health information exchange in the United States. We postulated that the combination of poor incentives to share data outside of organizations, combined with ever higher degrees of provider integration, created a natural and continuous barrier to interoperability. It still does. In the other post, Kevin Volpp makes the case that the health care system should adapt to delivering health rather that health care services, and uses the demise of Blockbuster to make the point that disruptive innovation comes from outside. True enough, but without a fundamental shift in benefit design and payment, the oxygen is depleted by the large incumbents who choke the innovators, and Kevin falls short to point that out, even though he certainly hints at the importance of the issue. Barring that, we would have to believe UPenn will start to voluntarily shut down hospital wards. I’m just not that naïve.

What this means to you – The United States has long celebrated the myth that bigger is better when, often, bigger has been disastrous. Part of that myth dates back a century or more, when bigger factories did mean more jobs and opportunities, far more rapid economic development, and increased prosperity. Scale mattered. And scale still matters, but far less. The internet of all things, quantum computing, and extreme mobility have completely upended the old order for the benefit of consumers. The incumbents know this and fight it at every turn. Large health systems block information sharing and try to keep captive patients. Large companies buy-up start-ups, making venture capitalists rich, but also killing innovation in the process. The smarter entrepreneurs, the true revolutionaries, understand this and never sell out, but they are the exception. Julia Adler-Milstein and Kevin Volpp both present the keys to a very different future, one in which the free flow of information enables care to be truly centered around the patient, and not by the incumbents whose view of patient-centeredness is that they are the center and patients come to them. A glimpse of that future is seen with new companies such as Sherpaa, and IoraHealth, and it terrifies the large health systems. To accelerate the coming of the future, we must continue to unleash alternative payment models and health plan benefits that breathe oxygen to the disruptive innovators. And that means curtailing total cost of care models and blunt force high deductible plans because they accomplish the opposite. If you believe that bigger health systems are better, then keep feeding the beast. The rest of us will be trying hard to starve it.


Francois Sig