Newtown, CT – January 1, 2016
When two mega trends combine, no one can predict the outcome, but let’s venture a guess – The past decade has witnessed the acceleration of two mega trends that, separately, have had and will continue to have certain effects. But when you combine the trends, as is happening now, the effects can be amplified and new, unforeseen effects can emerge. The first mega trend is consumerism and some of the effects already in play include the push for transparency of price and quality, the conversion of chunks of care into a retail business, and the socialization of information on treatments and of personal health data. The second mega trend is the shift to alternative payment models (APMs) and its effects to date are mixed. Much of the effect has simply been a massive consolidation of providers, which, as was again exposed recently, is translating into higher prices for consumers. But other effects are more encouraging including a shift to better supply chain management, as well as quality and cost improvements, which Susan DeVore delineates in a Health Affairs blog post. To some extent, the effects driven by consumerism are consistent with the effects of APMs, and to some extent, they’re not. But when you blend them together, they create quite the unique dynamic.
What this means to you – As transparency of price and quality moves from the anemic state of today to the more dynamic one of tomorrow in which consumers can compare the total price for the management of a condition, illness, injury or even of a specific treatment, the differentiating value of providers won’t be that of a vaguish brand name, but rather the guarantee on the price, the customer service offered to the consumer-patient, and the positive outcomes. As the retail forces eat up the majority of the health care dollars from the 80% of commercially insured plan members that spend less than their $5,000 yearly deductible, physician practices and health systems that have relied on that patient flow to upsell or simply to cover fixed costs, will have to change the very structure of their organizations. As the supply chain becomes more efficient, the buying advantage of health systems will be diminished and smaller, more nimble provider organizations will emerge, focusing on giving consumer-patients a truly wowing experience. And as consumers expect information that flows through their smartphones and watches to flow to and between their providers, all the while providers increasingly demand the same, the ability to clinically integrate around the patient without having to institutionally or organizationally integrate will grow. The combined effects of these mega trends have the potential to fundamentally change the shape of the delivery system into something that is truly at the patient’s service, from the absurd and overly expensive physician-centric system of today. And what’s truly exciting is that the effects driven by APMs and consumerism can reinforce one another in a continuous virtuous cycle. Now that’s happy news for a new year, even if it is a wild guess of what can be.
Francois de Brantes