Editor’s note: This post is part of a Health Affairs Blog symposium stemming from “The New Health Care Industry: Integration, Consolidation, Competition in the Wake of the Affordable Care Act,” a conference held recently at Yale Law School’s Solomon Center for Health Law and Policy. Links to all posts in the symposium will be added to Abbe Gluck’s introductory post as they appear, and you can access a full list of symposium pieces here or by clicking on the “Yale Health Care Industry Symposium” tag at the bottom of any symposium post.
This is a fascinating time in health care. It is a time of experimentation and innovation. We are reimagining a $3 trillion industry to improve quality, construct a better payment model, and develop a more integrated system of care delivery that will enhance access and convenience.
As we embark on this journey, a simple but important question faces all providers: Do we understand the difference between medical delivery and health? Those who do—and see themselves in the ‘health business’—will succeed as the industry transforms. Those who do not—and remain only in the ‘hospital business’—will feel it in their wallets and struggle to survive.
The reason for this is that the health business is not just about the hospital business anymore. That reality has been difficult for some providers to grasp. Do we need hospitals? Yes. When you get really sick or experience a serious injury, you need hospitals. When you have a chronic condition, you may need hospitals — although we are getting better at successfully managing the care of chronically ill patients in their homes or community-based settings. Hospitals do great things. They provide phenomenal service. But they are not, nor were they ever intended to be, wholly synonymous with health care.
With advances in science and technology, most surgery can be performed less expensively and just as safely outside of a hospital. The expansion of ambulatory services, urgent care centers, and free-standing emergency rooms has dramatically reduced the utilization of hospitals. Compared to a decade ago, between 30 and 40 percent of the procedures traditionally performed in medical centers can now be done in ambulatory settings.
It is the blessing and curse of innovation.
It is also the death knell for those who do not adapt from a hospital-only model. After all, if you are in the ‘hospital-only’ business and reduce the need for hospital utilization, how do you stay in business? You can’t. That’s why we must diversify.
Today, the lines delineating the many different stakeholders in the health business are increasingly blurred. Providers are becoming insurers and insurers are becoming providers. To achieve success in this new paradigm, all of us need to work more collaboratively, with the overarching goal of keeping people well and delivering care more appropriately to those who do get sick or injured. We need to provide people access to better, more-affordable care — outside of the hospital. To offer and manage care across the full continuum, you have to innovate and bring resources and pieces together to address the holistic nature of the person’s condition, not just the episodic nature of illness.
A Focus Not Just On Health Care But On Education, Insurance, And Many Other Areas
As president of the largest health system in New York, I am in the ‘health’ business. By default, that means I am also in the ‘hospital’ and ‘ambulatory services’ business, the ‘insurance’ business, the ‘education’ business, and the ‘research’ business, among others. That’s because all of these pieces contribute to the continuum of providing better health to the communities we serve.
Because health and the delivery of care are changing, teaching future physicians and nurses the same way we have for the past 100 years would be a mistake. So, for example, our health system partnered with Hofstra University to develop new medical and nursing schools, whose mission is to train clinicians for the 21st Century and beyond. That’s why we are in the education business. When it opened in 2011, the Hofstra Northwell School of Medicine in New York was the first new medical school in New York State in 40 years, one that puts students in the field from day one. It just graduated its first class last May.
We are also partners in an insurance company. People ask, “Why did you want to get into insurance?” Like, somehow, we let the fox into the hen house. The answer goes back to being in the ‘health’ business. We want to have as much control as possible over the premium dollar so that we can manage people’s health and not just manage people’s illnesses. That way, when we reduce the utilization in a hospital, we get to keep some of the savings.
The old model was a terrible misalignment of incentives. We could do wonderful things to reduce hospital utilization, but if the insurance companies got the savings and left hospitals with the cost, where did that leave providers or their patients? By effectively being in the ‘insurance business’ and partnering in an insurance company, we can more appropriately align the incentives.
Reinventing an industry is a challenge and also a golden opportunity. We should always view the cup as half full rather than half empty. When I am asked what Northwell Health wants to be in the long term, my answer is: “I want to be in the health business, the health promotion business, and the wellness business, as well as the illness care business. I want to be able to do all those things well.”
To do that, we have to have the right structures, the right delivery components, the right alignment of incentives and the right partnerships. For those who are willing to be creative, for those who are looking to innovate, it is a great time to be in health care.
from Health Affairs Blog http://ift.tt/1p4QNaW
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