The Coming Disruptive and Transformational Changes in Health Care Delivery

Has your doctor said he or she will no longer accept your insurance? Do you see more and more of your employees with chronic illnesses, largely due to lifestyle behaviors such as poor nutrition, stress, sedentary attitude and some 20% smoking? Are they getting adequate preventive care and good coordination of care if they have a chronic illness like heart failure or diabetes with complications?

There will be some very disruptive and some transformational changes in the way health care is delivered, not as a result of reform, but as a result of the drivers of change described in a previous post on Vistage. They included an aging population, an obese society, shortages of doctors, and emerging consumerism, among others.

I interviewed in depth about 150 medical leaders from across the United States to collect information and then distilled it down to a few key observations for my new book “The Future of Health Care Delivery – Why It Must change And How It Will Affect You.”.

As a result of those previously discussed drivers of change, here is what we can expect to occur in the coming years.

First, there will be many more patients needing substantial levels of medical care. These won’t be just any patients but two specific groups that are growing rapidly. Americans are aging. “Old parts wear out” and there are certain diseases that become more prevalent with age like Alzheimer’s and osteoarthritis. And of course our society has many adverse lifestyles such as consuming too much of a non-nutritious diet, being sedentary, being chronically stressed and 20% still smoke. These all lead to chronic illnesses like diabetes type II, heart failure, cancer, chronic lung and kidney disease, etc. So there will many more individuals with chronic illnesses. The especially sad thing is that many of these individuals will be moderately young as a result of obesity since one third are overweight and another one third are frankly obese. This increase in chronic diseases and diseases of aging will have huge impacts on care delivery.

With more patients in need of care, there will be a need for more hospital beds, ICUs, ORs, high technology and interventional radiology.         This is different than the mantra of recent decades which proclaimed that we had too many hospitals and too many beds. Now it is the just the reverse. This too is a big change.

But building new hospitals or new wings or renovations cost a lot of money. So does technology such as the electronic medical record, new CT or MRI scanners, and the needed technology for the operating rooms or radiation therapy equipment. To garner the required money, hospitals will need to access the capital markets. But credit is tight and has gotten tighter in recent years. What will smaller hospitals do that have less ability to enter the credit markets? Merge with larger systems to get access to capital. So there will be more and more smaller hospitals merging into larger systems. Indeed there will be few stand alone community hospitals in the coming years. This is quite a disruptive change.

There is already a shortage of primary care physicians and this will undoubted accelerate since few are entering primary care today after medical school and training.  In part to compensate, there will be greater use of NPs and PAs, especially in primary care. No they cannot take the place of the physician as many would assert, but they can be very effective and allow the MD to do what he or she is best at doing. Together they can create an excellent team.

Primary care doctors are caught in a catch 22. They are in a non sustainable business model. Reimbursements from insurers have stayed level for years but office and other expenses have gone up each year. So in order to keep their personal income at least flat, they need to “make it up in volume” by seeing more patients. This means no longer visiting their patients in the hospital and in the ER. Instead they wait for the hospitalist or the ER doctor to call with reports. And they shorten the time with each patient so they can see 24 to 30 patients each day.

But seeing this many patients means they cannot give comprehensive preventive care and cannot adequately coordinate the care of their patients with chronic illnesses – two of the key things a PCP should be doing for optimum quality care.

There are at least two approaches PCPs are taking to counter this dilemma. One is to no longer accept insurance and rather expect patients to pay a reasonable fee at each visit. Pay at the door. It cuts out a lot of haggling with the insurer and means they can spend more time with the patient. The PCP saves an incredible amount of money now spent for coding, billing and administration – non patient care activities dictated by the current insurance model. Importantly, it recreates a normal, typical professional-client relationship since the patient, not the insurer, is paying the doctor directly.  But this is certainly a disruptive change to not accept your insurance! It is like going back a few decades.

Another approach gaining rapid popularity is to switch to retainer based practices, sometimes called concierge or boutique practices. The basic concept is to limit one’s practice to 500 patients rather than the typical 1500-2000 or more. This means more time per patient. So in return for a fixed fee of about $1500-2000 per year the PCP agrees to be available by cell phone 24/7 and by email. He or she will see you in the office within 24 hours of a call. You get as much time as needed for the problem at hand. And the PCP will visit you in the hospital, the ER or the nursing home – maybe even do a house call.

The result is better quality. But there is more. Since the doctor now has the time – the patient now gets much more preventive care attention. And if a patient has a chronic illness, the PCP will take the very real time needed to coordinate that care. This will mean much better care from the specialists and will avoid unnecessary tests, scans and procedures. Better care at less expense.  – One more very disruptive and I would say transformational change occurring in medical care delivery.

Medical care delivery is changing – rapidly. Some of these changes will be disruptive or the status quo and others will certainly be transformative. You need to consider these changes as you define your company health plans going forward. You can make us of these changes to augment your employees’ care, reduce expenses and see quality rise.

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Stephen C Schimpff, MD is an internist, professor of medicine and public policy, former CEO of the University of Maryland Medical Center and consults for the US Army, medical startups and Fortune 500 companies. He is the author of The Future of Medicine – Megatrends in Healthcare and The Future of Health Care Delivery from which this post is adapted. Updates are available at https://medicalmegatrends.blogspot.com

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