Posted 5/23/13 on Medscape Connect’s Care & Cost Blog
Several physicians have reached out recently to discuss attractive employment offers from health systems. They are invariably conflicted. They understand the trade-offs, that they’ll give up the autonomy they’ve become accustomed to in exchange for more money and fewer practice management headaches. On the down side, they’ll be accountable for generating significant revenues, sometimes independent of care appropriateness.
Most also are aware that the same care services they provide now will be considerably more expensive once they’re part of a system. Many appreciate that because health systems are corporations with a heavy focus on optimizing short term gains, their future employer’s loyalty is suspect. And then there is the question of whether the health system’s management team is competently preparing to be sustainable in a market that could change dramatically.
As health systems maneuver to dominate regional markets, driving utilization and gaining more leverage over contractual pricing, physician employment has become their principal lever. Primary care physicians (PCPs) are now precious commodities that can manage populations and steer patients into the system’s services. Other specialties – e.g., cardiology, orthopedics, neurosurgery and even gynecologic oncology – are desirable if they’re high yield, driving lucrative, intensive use of inpatient and outpatient services.
Continue reading “Physicians, Health Systems and the Drive For Market Dominance”
Published April 2013 in Accountable Care News
If necessity is the mother of invention, then tentativeness and ambiguity are the parents of procrastination. In health care, fee-for-service remains the dominant paradigm, so the ACO movement, lacking almost any semblance of true financial risk, is far more bark than bite. What’s the point of health systems going to all the trouble – and there’s no question it will be an overwhelmingly complicated overhaul – required to move from volume to value if it isn’t a pressing concern? Or, as several health system CFOs have expressed it, “Why should we change what we do and take less money until we have to.” There is no immediate imperative.
But there are some strategic imperatives. Overall health care cost has continued to explode. Kaiser Family Foundation data show that, for more than a decade, health plan premiums have risen 4.5 times as fast as general inflation and more than 3.5 times workers earnings. A recent RAND calculation showed that $4 of every $5 of household income growth is now absorbed by health care. It doesn’t seem likely that much more revenue can be squeezed from group and individual purchasers. (Though many of us have been saying that for decades.)
Continue reading “Seriously Testing The ACO Waters”
First posted 9/08/11 on Health Populi
Revenues = volume x price. This is the financial reality for every organization that makes its money serving customers, whether for-profit or not-for-profit.
For the U.S. hospital sector, both volumes and prices are falling, leading to a depressed top-line. Reimbursement reductions from Medicare, Medicaid and commercial health plans are all under pressure: that’s the ‘price’ part of the equation. On the volume multiplier, the recession economy has caused patients to delay care, such as elective surgeries. Hospitals are forced to scrutinize every aspect of operations, according to Hospital Revenues in Critical Condition; Downgrades May Follow, from Moody’s Investors Service.
Continue reading “U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years”
First published 3/9/11 on [Not] Running A Hospital
As I share this view from my room in Tel Aviv after leaving theconference in Haifa, it is a good chance to consider the features of the Israeli health care system and draw some comparisons with that of the US. You can find a full description here, but let me hit the highlights as I understand them, based on discussions over the last two days.
Continue reading “Observations on the Israeli Health System”
Originally published 1/3/11 in The Fiscal Times
Beyond the legal challenges, a major new hurdle is emerging for the health care reform law. Recent studies show that the major players in the health care marketplace – insurers, hospitals and physician practices – are consolidating, which increases the likelihood they will collude on prices charged to employers and to consumers and defeat cost control measures in the law.
Continue reading “ACOs and Anti-Trust”