Gazing into the Health Care Crystal Ball
Yesterday I attended a two and a half hour breakfast conference in San Francisco on The Future of Healthcare, at the kind invitation of City National Bank, one of the sponsors. The conference featured George Halverson, the Chairman and CEO of Kaiser Foundation Health Plan, Wright Lassiter, the CEO of Alameda County Medical Center, a safety net hospital , Cal Knight, President and CEO of John Muir Health (a large community hospital based company in Walnut Creek, CA), and Darryl Cardoza, incoming CEO of Hill Physicians Medical Group, a very large multispecialty medical group in the Bay Area. In other words, health reform from the CEO perspective (where was the Blue Cross CEO, I wondered). The moderator of the roundtable was Chris Rauber, a healthcare beat reporter from the San Francisco Business Times. The large Hilton ballroom was fairly packed, mostly with what I call the ‘administrative 20%’, people who are engaged in managing, assisting, supporting, funding, directing, consulting, and otherwise having some impact on how the other 80% actually provide health care. There were a smattering of doctors and a few nurses, but most of those were on the administrative / consulting side, like me.
Here are some of the interesting things I think I heard (should have taken notes). One of the first questions Mr. Rauber asked was: “Other than health reform issues, what is the greatest challenge you currently face?” The answer, in a nutshell, was: health reform issues. I was surprised to see that all four speakers praised Obamacare, not so much because it was the right thing, but because it moved along the inevitable changes that all felt needed to be made in order to fix the current system, which was acknowledged by all four to be inefficient, way too expensive, and comparatively ineffective when it came to improving health.
So what were these inevitable, and likely beneficial changes? There were no surprises here: health IT,; integration of hospitals, insurers, and providers; a focus on prevention rather than intervention; consolidation for efficiency; payment reform: all the usual suspects. I got the distinct impression that these CEOs had already climbed the wall of worry, and were committed, at least publicaly, to adapting to the inevitability of these changes even if that required a significant investment of capital, and/or a major involution of their fee-for-service business models. In fact, they seemed to be consistently supportive of the ‘shalls’ in the Affordable Care Act that puts regulatory pressure on all of their institutions to reduce errors, align with patient centered care, make performance and infection rates transparent, and the like. This was a bit incongruous in light of the subsequent grumbling over regulations related to hospital construction, but I had the sense that these guys had really drunk the health reform Kool-Aid, and were seriously engaged in trying to fix the health care system, each according to their adopted perspective.
The CEO of Kaiser talked about building smaller, very efficient and patient-friendly hospitals (he did not use the word ‘feeder’, but I suspect there is some forward-looking marketing plans behind this effort). He also told a disturbing story about an organization of providers in the Northeast that declined to adopt strategies to improve care and reduce errors because their margins depended on their mistakes. It sent a ripple through the audience. Personally, I think ALL healthcare organizations live in glass houses, and those providers that go ‘at risk’ for the cost of care need to be especially vigilant. The CEO of the county hospital cited plans to enhance the experience of care and service in his institution, both because it was the right thing to do, and because it would help the institution recruit and retain the newly insured, who under Obamacare would now have more options to chose where to go for care. At first I thought he was talking about the expansion of Medicaid, but then I realized he was probably referring to the health insurance exchange market. Both the community hospital CEO and the mega-medical group CEO noted the need for alignment between hospitals, physicians and payers in order to succeed in the coming era of cost-containment in health care. When it comes to alignment, I agree, but I also believe the devil’s in the details. The funniest comment of the morning related to the purported reduction in Viagra use by hospital CEOs who happened to be in the process of erecting new hospital wings.
Finally, the moderator decided to allow some questions from the audience, and there were some good ones, including one about what to do if your own doctor is not hooked into an integrated electronic medical record system (“Get a new doctor” was the reply), and another about retail clinics (the jury was still out, but since they provide episodic care, rather than integrated care, maybe that wasn’t so good). I got the sense that the word ‘integration’ is the new mantra. The last question, which I didn’t hear clearly, appeared to be offered by a safety-net provider who wondered where all those new Medicaid patients were going to get their care. The answer seemed to be: someone (the government ?) needs to give you more money so that YOUR practice can expand to meet the demand. I didn’t hear anyone else volunteering to pick up the slack, and thought: ‘Good luck with that’. I had a hand up to ask a question, but the moderator said he was looking for “a really GREAT question” as time was almost out. Who wants to try to jump over that hurdle?
I enjoyed this conference, even if it left us all with a lot of unanswered questions. I believe these CEOs are sincere in their desire to fix the broken system, and the fact that they agree on many issues despite the fact that they have competing objectives lends some optimism to the outlook, notwithstanding the coming decision of the Supreme Court.
So here’s the question I did not ask: In a health care system that is very competitive, and usually profit driven, it seems like most medical research is designed to identify what appears to provide slightly better outcomes for substantially more money, rather than equivalent outcomes for a lot less money: so who is going to do the research that determines cost-effective care, and who is going to pay for that research? With all that great data those new IT systems are going to generate, will the answers come from these new ‘integrated health care’ companies? I guess that depends on the future of health care, and who creates it.
