Health Care in the Next Curve: Transforming a Dysfunctional Industry PDF
Preview Health Care in the Next Curve: Transforming a Dysfunctional Industry
Health Care in the Next Curve Health Care in the Next Curve Transforming a Dysfunctional Industry John Abendshien A PRODUCTIVITY PRESS BOOK Routledge Taylor & Francis Group 711 Third Avenue, New York, NY 10017 © 2019 by Taylor & Francis Group, LLC Productivity Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed on acid-free paper International Standard Book Number-13: 978-1-1386-2654-6 (Hardback) International Standard Book Number-13: 978-1-3152-2813-6 (ebook) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www. copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging‑in‑Publication Data Names: Abendshien, John, author. Title: Health care in the next curve : transforming a dysfunctional industry / John Abendshien. Description: Boca Raton : Taylor & Francis, 2018. | Includes bibliographical references. Identifiers: LCCN 2018009308 | ISBN 9781138626546 (hardback : alk. paper) | ISBN 9781315228136 (ebook) Subjects: | MESH: Health Care Sector--economics | Economics, Medical | Health Care Sector--trends | Insurance, Health--economics | Delivery of Health Care--economics | United States Classification: LCC RA410.53 | NLM W 74 AA1 | DDC 338.4/73621--dc23 LC record available at https://lccn.loc.gov/2018009308 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the Productivity Press Web site at http://www.ProductivityPress.com Routledge Taylor & Francis Group 711 Third Avenue, New York, NY 10017 © 2018 by Taylor & Francis Group, LLC Contents Productivity Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed on acid-free paper International Standard Book Number-13: 978-1-1386-2654-6 (Hardback) International Standard Book Number-13: 978-1-3152-2813-6 (ebook) This book contains information obtained from authentic and highly regarded sources. Reasonable Foreword ..............................................................................xi efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and Preface .................................................................................xv publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any Author ................................................................................xix copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. SeCtion i inDUStRY DYSFUnCtion: itS Root Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or CAUSeS AnD eFFeCtS hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. 1 It’s Not the Future We Used to Have ........................3 For permission to photocopy or use material electronically from this work, please access www. The Old Future ...................................................................4 copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), The Curves of Health Care .................................................6 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a The Root Causes of Industry Dysfunction .........................7 photocopy license by the CCC, a separate system of payment has been arranged. The Economic Human and the Next Curve .....................10 Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are Fast Forward: A New Future .............................................12 used only for identification and explanation without intent to infringe. This Book: A Look Ahead .................................................13 Library of Congress Cataloging‑in‑Publication Data References ..........................................................................15 Names: Abendshien, John, author. Title: Health care in the next curve : transforming a dysfunctional industry 2 Health Care’s Perfect Storm ...................................17 / John Abendshien. The Gathering Forces ........................................................18 Description: Boca Raton : Taylor & Francis, 2018. | Includes bibliographical references. What’s Wrong with This Picture? .......................................20 Identifiers: LCCN 2018009308 | ISBN 9781138626546 (hardback : alk. paper) | ISBN 9781315228136 (ebook) Costs on an Upward Trajectory .........................................22 Subjects: | MESH: Health Care Sector--economics | Economics, Medical | Health Heading toward a Spending Ceiling .................................23 Care Sector--trends | Insurance, Health--economics | Delivery of Health Care--economics | United States Is Rationing the Default Scenario? .....................................24 Classification: LCC RA410.53 | NLM W 74 AA1 | DDC 338.4/73621--dc23 LC record available at https://lccn.loc.gov/2018009308 References ..........................................................................25 3 What Happened to Health Insurance? ...................27 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com A Perfectly Dysfunctional Model ......................................28 and the Productivity Press Web site at Affordable Access: Still No Fix ..........................................30 http://www.ProductivityPress.com v vi ◾ Contents Mandates Mean Fewer Products, Higher Prices ................32 Employer Health Plans: Not What They’re Cracked Up to Be .............................................................................33 Medicare Trouble Ahead ....................................................36 Medicaid Also Facing an Uncertain Future .......................38 One Size Doesn’t Fit All .....................................................39 References ..........................................................................40 4 Follow the Money: A Broken Payment Model .........41 Why Not “Food Insurance?” ..............................................42 Fee-for-Service an Incentive for Utilization ......................44 Impact on Care Coordination ............................................45 A Recipe for Waste, Fraud, and Abuse .............................46 Moving toward Value ........................................................48 Problems Measuring Value ................................................51 References ..........................................................................53 5 Silos, Everywhere ..................................................55 Automobiles Get Pretty Good Health Care… ...................56 Where’s the “System” in Health Care? ...............................58 The Problems of Service Fragmentation ...........................60 Information Silos: Part of the Problem ..............................62 Geographic Silos, Too .......................................................64 Population Health: More Teamwork Needed ...................64 Silo Culture Part of the Industry’s DNA ............................65 References ..........................................................................69 6 The Real Costs of Regulation ...............................71 The Perils of Regulatory Overreach ..................................72 The Computer Will See You Now .....................................73 The Price of Regulating Prices...........................................76 Certificate of Need a CON Job ..........................................78 More Regulation, Less Innovation ....................................80 Frozen in Time ...................................................................82 Tort Reform, a Critical Need ..............................................83 The Real Costs of Regulation ...........................................84 References ..........................................................................85 Contents ◾ vii 7 Where’s the Competition? .....................................87 Competition and Value .....................................................88 More Government, Less Competition ................................89 Independent Physicians: An Endangered Species ............92 Eroding Competition in the Insurance Market .................93 Conflicting Market Signals .................................................94 Narrow Networks, Narrower Choices .............................. 96 Consumers Caught in the Middle ......................................97 References ..........................................................................97 8 Why Government Health Care Isn’t the Answer .....99 “It’s the Government: They Know Best….” .....................100 Medicare for None? ..........................................................103 Single Payer Means Higher Costs ....................................106 Rationing Is an Inevitable Outcome ................................108 Impacts on Education, Research, and Innovation ..........109 Administrative Costs Aren’t Necessarily Lower ...............110 Single Payer Very Popular—Until People Understand What It Is ......................................................111 Americans Don’t Do Socialism Very Well .......................114 References ........................................................................115 9 Market Disruptors and Transformers ..................117 Big Data and a New World of Precision Medicine .........118 The Patient Is in ...............................................................120 A Fusion of Segments ......................................................122 Employers/Health Care ................................................123 Big Pharma/Insurance/Health Care ............................125 Providers/Health Plans .................................................126 Providers/Suppliers .......................................................126 Is the Community Hospital Becoming Obsolete? ...........126 Collective Consciousness and an Empowered Market ......129 References ........................................................................130 viii ◾ Contents SeCtion ii HeALtH CARe in tHe neXt CURVe: A RoADMAP to inDUStRY tRAnSFoRMAtion 10 Destinations of the Next Curve ...........................135 Access, Choice, and Value ...............................................136 Access ...........................................................................136 Choice ...........................................................................137 Value .............................................................................138 A Roadmap to Industry Transformation ..........................139 11 First, the Safety Nets ...........................................143 Facing the Realities of Safety Net Needs .........................144 I-1 Provide Universal Catastrophic Coverage ..............145 I-2 Put Invisible Reinsurance Safety Nets in Place for Those with Pre-Existing Conditions ......................146 I-3 Assure Guaranteed Issue, but with Incentives for Continuous Coverage .............................................148 I-4 Overhaul Medicaid: Make It a True Safety Net for the Chronically Ill and Disabled, and a Transitional Program for the Able-Bodied ...............149 I-5 Restructure Medicare to Ensure Long-Term Solvency ........................................................................152 I-6 Give Military Veterans Choices, Too ......................155 References ........................................................................156 12 Insurance and Choice, Once Again ......................157 Restoring the Concept of Insurance ................................158 II-1 Promote the Growth of Consumer-Directed Health Plans and Health Savings Accounts .................158 II-2 Get Rid of the Employer Tax Exclusion; Give Employees Options ......................................................160 II-3 Repeal Anti-Trust Exemptions; Energize Competition in the Insurance Market ..........................162 II-4 Eliminate Regulations That Standardize Insurance Product Design ............................................162 II-5 Revise IRS Rules to Make Preventive and Health Maintenance Care Pre-Deductible ...................164 Contents ◾ ix II-6 Promote Interstate Insurance “Regulatory Competition” and Sales ................................................165 13 From Production to Value ....................................167 Value in the Next Curve ..................................................168 III-1 Complete the Transition to Value-Based Payment Methodologies ...............................................169 III-2 Make the Patient-Centered Medical Home the Standard for Primary Care ...........................................170 III-3 Apply Bundled Payment Approaches to Chronic Diseases and Conditions ................................171 III-4 Design Multi-Provider Payment Methodologies to Support Inter-Disciplinary Care ...............................172 III-5 Pay Providers for High-Value Services and for Virtual Care ..................................................................172 III-6 Make the Shift to Transparent, Market-Based Reference Pricing ..........................................................173 References ........................................................................175 14 No More Silos: Patient-Centered Care in the Next Curve ...........................................................177 A Team of Teams .............................................................178 IV-1 Target High-Risk Patient Populations for Early-Stage Intervention ...............................................179 IV-2 Organize and Coordinate Health Services Delivery Around the Patient ........................................181 Develop Coordinated Disease Management Centers ......................................................................182 Integrate Behavioral and Social Services into the Coordinated Disease Management Center Model .....184 Align Addiction Treatment with Medical Care ........185 Develop Specialized Acute Care Units for Elderly Patients .........................................................186 Manage Post-Acute Care Transitions and Processes ...............................................................186 IV-3 Rationalize Delivery Platforms for Optimal Access, Effectiveness, and Efficiency ...........................188
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