Is Healthcare Reinventing Itself Fast Enough?

Bonny Sorensen

Bonny Sorensen


Published October 10, 2013

Now is the Time for a Paradigm Shift and to Think Outside of the Box

We are at the crossroads. There are 78 million American baby boomers born between 1946 and 1964 who will require more and more complex healthcare in coming years. And with the Affordable Care Act (aka Obamacare) being implemented across our nation, the healthcare industry could see an additional influx of 40 million newly insured individuals.

The numbers are staggering. Unless we are able to quickly shift our resources to the front side of the continuum of care, the healthcare system will be unable to survive this influx. No matter what care model you determine best fits the needs of your patient population and the communities you serve, you must immediately shift more of your resources to health coordination and promotion while strengthening your hospice and palliative care programs.

Conceptually, the continuum of care involves an integrated system that guides and tracks a patient over time through a comprehensive array of health services spanning all levels of intensity of care. However, there are distinctly different components to the continuum dependent upon the stage of life of the patient and the Major Diagnostic Category involved.

Historically, the healthcare industry built its continuum of care models around the needs of five distinct groups centered around the acute/sub-acute process:

  • The leadership role of the primary care physician
  • The critical importance of patient engagement, involvement and personal responsibility
  • The patient focus — care expansion coordination in the pre- and post-acute settings to include wellness, disease, care navigation and chronic care management programs

Early on, the continuum was relatively flat and spanned the physician community, outpatient testing and treatment, hospital settings, long-term care and patients' homes. Then new government regulations entered the scene with the implementation of DRGs in October 1983, followed quickly by managed care HMO-PPO contract requirements.

So, what once was a proactive, patient-centric health improvement model featuring a physician-guided delivery system designed to encompass the journey of life through coordination/promotion, early intervention, diagnosis and treatment must now incorporate not only patients, providers and families but also ever-changing government regulations and third-party payer contract restrictions.

This spending shift toward the far end of the continuum helped shape the incredibly costly healthcare system we have today. In 2004, the United States spent $1.9 trillion — or 16 percent of its GDP — on healthcare. This averages out to about $6,280 for each man, woman and child, compared to $1,106 in 1980. In 2012, the healthcare industry accounted for 17.7 percent of the US GDP.

Interestingly, when we look more closely at those numbers, we see that actual spending is unevenly distributed across individuals, segments of the population, diseases and payers. A study by the Agency for Healthcare Research and Quality found that half of the population spends little or nothing on healthcare, while 5 percent spends almost half of the total amount. According to the Centers for Medicare & Medicaid Services (CMS), about 25 percent of its outlays are for beneficiaries in the last year of life.

While the numbers are alarming, there's also a glimmer of hope. It's a documented fact that there exist critical junctures or opportunities to provide appropriate services and intervene in a disease process, thus eliminating or reducing the need for more critical services. Examples include coordinated primary care, wellness promotion programs and hospice and palliative care.

So, the question: Is the healthcare industry reshaping/reinventing itself fast enough to survive and thrive?

Our present beliefs will need to shift to accommodate the modern healthcare of tomorrow. If we are what we focus on, then now is the time for a paradigm shift to move a larger portion of our resources and efforts from the end-of-life process to wellness, prevention and early detection and intervention.

But how do we accomplish this and still deliver compassionate quality healthcare? Experts have proposed two potential models: vertical integration and contractual affiliation.

First, let's look at contractual affiliation. If you chose to build a model that places an emphasis on providing services that reflect the demand for health and healthcare within the governmental sector (Medicare and Medicaid), it could probably best be achieved via a collaborative planning approach with local care agencies.

Being tied closely to all federal, state and local governmental agencies should facilitate a continuing process of consumer participation at all levels of the continuum, from services planning through prevention and early intervention strategies, with patients assuming joint responsibility in the management of their treatment and rehabilitation processes.

But keep in mind a large portion of this population has proven to be noncompliant. Additionally, according to the government, "loose affiliation" is what we have had in the past, and it has met with minimal success.

If we take a lesson from other businesses and industries, vertical integration of the continuum of care makes sense. The two issues that should be considered when deciding whether to vertically integrate are cost and control. Kaiser Permanente (specifically in the California markets) is probably the best and most successful example.

The continuum of care you choose to develop for your organization must provide a platform for a cross-functional approach to healthcare management. All stakeholders should work together to assess the healthcare delivery system.

By conceptualizing the health status within the continuum of care for your patient population, you can evaluate your organization's current initiatives from both a programmatic as well as a benefits perspective. Based on this evaluation, you can identify the gaps in service and address cross-functionality to bridge these gaps.

Your health improvement model should highlight three major components:

  • Child and family health
  • Youth health
  • Adult health
  • Care for the aging
  • Behavioral health

When you can guarantee the consistent convergence of these roles, resource and capabilities, you should ensure higher levels of quality and patient and family satisfaction with the care delivery.

Wherever we look we see healthcare systems of all types undergoing major change. The pressure to change is constant regardless of the underpinning approach of the delivery system, and unless we change, we will soon be buried under the avalanche of the newly insured.

So now is the time for a paradigm shift and to think outside of the box. We cannot afford to miss this unique opportunity. Otherwise, the healthcare system as we know it will be buried under the influx of the newly insured.

Remember, Every Patient, Every Day, Every Time.

Partnering to improve patient lives

Vituity branding orange wave pattern background