The Biggest Change in the Healthcare System Is Not Reform

Ellis Weeker , MD, FACEP

Published April 18, 2012

Discount the posturing of politicians reaching for the healthcare issue that will attract attention and garner votes. Set aside the drama of the Supreme Court’s proceedings to determine the constitutionality of recent health care reform. Beneath that is something much more important. Don’t look at what politicians are saying, but watch what healthcare providers and insurers are doing.

Individuals, hospitals, insurers and others who are responsible for actually providing health care have already decided what they need to do. They are not waiting for the government to solve the health care crisis of the United States. During the debates that preceded the enactment of the Affordable Care Act, the providers and insurers saw the ugly and disjointed aspects of the American healthcare system : lack of end of life care for the burgeoning population of baby boomers, medical technology that seems to have no economy of scale, and the inability of the system to address wellness to reduce costs. In short, the horrendous expense without attendant increase in quality has been made apparent.

Most of those who understood the issues concluded that the current system is not sustainable. If we continue on this path, we will bankrupt the country. We simply can’t afford to have 40 million or so people without health insurance. Cost shifting their medical expenses onto the tax payers and private insurers has reached its limit. And, oh yes, don’t forget the national debt that must be paid down somehow.

So, while the politicians have been grandstanding and the press has been covering the Supreme Court, men and women of action have been quietly making the changes they deem necessary. Hospital systems have been consolidating. United Health Care has been purchasing physician practices around the country. In California they bought Monarch IPA. Memorial Health Systems bought Greater Newport IPA. The Daughters of Charity is consolidating with Ascension Health System in order to access more money for their new Foundation. Swedish Health System is consolidating with the Providence Health System. Insurance companies are buying IT companies to help them better manage their health care delivery. Aetna bought Medicity. Anthem has created a commercial ACO product and is not waiting on the government ACO model to mature.

The handwriting is on the wall. Disorganized and non-integrated providers will not be able to meet the new standards of health care demanded by government and insurers. The future is for those who can provide value and have capital to invest in new systems of care delivery. High quality at a reasonable price is what is being demanded by everyone. Practicing in silo fashion will only further increase costs.

No matter what, revenue is going to be curtailed. To preserve some of their income, providers are consolidating to increase leverage in their bargaining. Sutter Health has been doing this for years. The insurers are rethinking this consolidation and no longer want to pay inflated fees to them. For those who were listening to the debate, the message was clear. Change or be swept aside.

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