Health Care Reform: Incremental Change or Fundamental Shift?

During the Hospital of Tomorrow forum, hospital executives discuss whether health care reform is significantly changing the hospital industry.

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During the U.S. News & World Hospital of Tomorrow conference, panelists in the health care reform break-out session discussed the changes underway in the health care system and if they represent incremental change or a fundamental shift.

[More Hospital of Tomorrow Forum coverage: usnews.com/hospitaloftomorrow]

Panelists included David Burik, the Managing Director who co-leads Navigant's Healthcare Strategy, Dr. Gene Lindsey, M.D. CEO Emeritus and Vice Chair of Atrius Health, and David W. Johnson, Managing Director and Sector Head for Healthcare and Higher Education at the Public Finance and Infrastructure Group.

Burik began by asking about lessons can we learn from the Massachusetts health exchange and apply to a national model. Some of the findings of the Navigant study indicate that there are no national players, yet, in the healthcare system.

"So, if we're not national, what are we?" Burik asked. "The principal consolidation in this industry is local."

Burik also wondered: "Who is going to have primary care models?" He predicted the answer is in the "Walmarts, the Walgreens," and also in the clinics which are expanding their affiliate care centers, including The Cleveland Clinic (27 Affiliates), MD Anderson Cancer Center (9 affiliates), the Mayo Clinic (14 affiliates) and Duke Lifepoint Healthcare (4 affiliates).

Here are a few additional highlights of the Navigant study.

"In 2011, the Top 20 (by admissions) health systems operated 20 percent of the hospitals and captured 26 percent of total U.S admissions," he said. "In 2003, the Top 20 operated 18 percent of US hospitals and captured 23 percent of admissions."

"Will the market or government have a larger hand in the result?" The short answer, Burik offered, is yes. We are seeing that change through exchanges that are introducing health insurance plans with narrow networks.

Dr. Gene Lindsey, of Atrius Health, began by asking "Why are organizations consolidating?" and specifically addressed why Atrius came to be. The short answer was "to create capitol."

"We were trying to unlock the vault of money, which in my mind, was the waste in the organization," Lindsey explained. "In essence, we had gotten together to have better leverage. We were all playing in the same sandbox, but all by ourselves."

At Atrius, Lindsey explained, "We have our own MRIs, we do our own labs, we do all of the things that fall under the category of ancillary medicine that the hospital does."

Looking forward, "Affiliations that don't create benefit for the public will not be approved," he said. For example, "It will not be allowed for you to come together to extort more money from Blue Cross."

"This collaboration between ancillary institution and hospital is coming up with a goal so that we all remain financially viable," Lindsey added.

So what's the final destination? Lindsey predicts "One single group, shared assets, and shared vision to achieve a triple aim."

David W. Johnson of the Public Finance and Infrastructure Group pointed out while executives are discussing "How do we do what we do better," due to people's lifestyle habits and choices, "We could construct the best healthcare delivery system in the world and still have this problem."

Ultimately, the panelists concluded, that though observable at varying rates, the healthcare system is undergoing a fundamental shift in how it operates.

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