Change the Incentives and the Delivery System Will Adapt

Submitted by on Friday, July 11, 2014 - 01:20

So far, this year, there have been an estimated 111,498 health care-related preventable deaths – That's more than due to any other cause and yet few seem to care and many of those that do have become desensitized to the number. But not all. At a recent event in Aspen, Jonathan Bush of Athenahealth let loose during a panel discussion that included Toby Cosgrove of Cleveland Clinic. He called those who donate money to inefficient and ineffective hospitals murderers-by-proxy. Those are harsh words but at some point we all have to take the gloves off and simply stop accepting the status quo. Dr. Cosgrove pointed out that the average occupancy rate of hospitals is 65% and that we have too many beds. We made the same point two years ago in a four-city study that clearly showed the cost to the community of excess bed capacity. And that was a financial analysis, not one that measured the cost in human lives. The bottom line is that the forces of real competition, which include harsh business penalties for those who fail to deliver good care at a reasonable price, must assert themselves a lot faster than the current pace suggests.

What this means to you – the Blue Cross Blue Shield Association released a study yesterday that highlights some of the new payment models deployed by its member plans, but behind the hoopla there is very little of true substance. A few plans, like the Blues of NC, NJ, TN, AR and SC are being aggressive and innovative, but many others are still circling the wagons around business as usual. Most of the incumbents have become desensitized to the harshness of the financial and physical harm inflicted on ordinary Americans by the health care industry, and most fail to understand the depth of the changes that are underway. At the recent Bundled Payment Summit, Steve Wiggins gave an important historical perspective on some of these changes and his talk is worth listening to. What he highlights is what we've intuitively known for some time – that consumers armed with good information will make good decisions, and that a true market that serves their needs can emerge from it. That's frightening for those who cling to the status quo, whether provider or payer, because it will destroy their current business models. A fact made clear by Cosgrove and Bush, and reinforced by the release of the study on payment changes in cancer care. Change the incentives and the delivery system will adapt, even if not always in the way expected. The important point is that the system does change and that the change has an effect. We all have a role to play in pushing for such change, and must remember every day that as the clock ticks, another life is lost. For how long will we all be murderers-by-proxy?